How Will Andy Burnham Affect SMEs?

As yet another PM enters Number 10, attention turns to how the Whitehall reshuffle will affect UK businesses.

After years of struggle, there was some hope among directors that Kier Starmer’s government might have relieved some of the burdens that SMEs face. Two years on, however, and it’s fair to say that hasn’t been the case.

Higher National Insurance payments, an increased minimum wage, and continually high utility bills have all played their part in maintaining a hostile environment for British businesses. This leaves Andy Burnham with a mountain to climb in terms of winning back the business vote.

So what can we expect from Burnham’s tenure?

Business rates reform

Burnham has been vocal about a change being needed here for some time. He seems aware of the burden it’s become for the hospitality sector and has already pledged to make cuts that will benefit pubs. A 20 per cent cut will be added on top of the 15 per cent relief that was announced earlier in the year.

This is estimated to apply to over 32,000 businesses, saving an average-sized pub around £1,100 per annum.

He’s especially keen to attempt to rejuvenate British high streets too and has even said that high street stores may not have to pay any business rates at all.

The plan is to charge large businesses such as Amazon more for sprawling warehouses. This, in theory, should allow financial leeway for the government to raise the threshold for business rates, lifting many small businesses out of the bracket entirely.

Public procurement changes

Changes are to be made to contracts for working on government projects. Rather than automatically opting for either the cheapest option (or the business with the most links to a minister), contracts will now be required to provide some social worth to local communities.

There will be stronger weighting offered to bids from UK-based companies, and firms that are local to wherever the project is based. Smaller, independent businesses will be allowed more opportunity for local authority jobs too, as a result of relaxing several administrative barriers.

Electricity bill reductions

Businesses that require a heavy amount of electricity to run will be pleased to hear plans to remove VAT from electricity bills announced.

This should benefit manufacturing firms, engineering companies, and the hospitality industry again. Restaurants and bars often rely on the use of power-hungry dishwashers, industrial ovens, large refrigerators and other equipment.

A blow to certain businesses

As well as going after big businesses with large warehouses, Burnham plans to fund these changes by cutting relief for businesses that “do not make a positive contribution to local communities”. What this means in practice, however, is unclear and obviously open to interpretation. The only type of business that Burnham has explicitly described in this regard is the almost ubiquitous vape shop.

Whatever the future throws at your business, you can count on us

At Forbes Burton, we have business experts that specialise in several different fields. If you’re worried that some of the new government’s policies may have an adverse effect on your company, then get in touch with one of our friendly advisers. We provide free, no-obligation advice to help directors and business owners navigate any issues they have.

Our experienced team of specialists can help from everything from M&As to renegotiating HMRC payments. Call us on 0808 280 6038, or email advice@forbesburton.com for a free consultation today to see how we can help your business.