SMEs – the Chancellor’s forgotten businesses

By Mike Hackett, Chief Commercial Officer, ThinCats

As a lender and as someone who has worked directly with businesses for more than 20 years, I and my colleagues have a keen interest to ensure that the Government is doing the right thing when it comes to supporting companies.

Clearly, there are some things out of the Government’s immediate control – not least tariffs last year and the conflict in the Middle East. The surge in oil and gas prices will have an impact on everyone.

However, taking a step back, a running theme when assessing how the Chancellor and Government are doing when it comes to supporting business and running the economy, then perhaps it’s polite to say that there has been a disconnect between the words and the reality when it comes to policy. Given concerning growth numbers, can they turn things around?

March has been a busy month for words and promises from the Chancellor, but little action. Despite delivering two speeches focused mostly on growth - the Spring Forecast and the reputable Mais lecture, both events lacked any concrete plans to bolster SME growth, which account for 99.2% of the business population. 

In the Spring Forecast, the Chancellor delivered a 20-minute, policy-free, speech homing in on the importance of stability. I know many of you will be thinking that that’s a good thing, but I would argue there’s a wasted opportunity to recommit to working with SMEs.

In her Mais lecture, Reeves discussed three big choices for the decade ahead including stronger relations with the EU, AI and innovation, and “growth in every part of Britain”. There was a particular focus on the ambition to improve the connectivity between Oxford and Cambridge. Good – let’s get on with it and while we’re at it let’s do the same between Edinburgh and Glasgow, Leeds and Manchester, Birmingham and Sheffield. Less talk more action.

How many warning signs in the economy does the Government need to get on with helping businesses to flourish?

In spite of what the Government is (or isn’t) doing, businesses continue to adapt, invest and grow. In the last quarter of last year, we saw an uptick in deal activity and looking at our own pipeline of deals we’re seeing appetite from manufacturing, retail, and other "real economy" businesses seeking finance to enable growth.

However, businesses and consumers are understandably cautious, not least by events in the past fortnight, so it is no surprise that growth forecasts remain cautious. Some of those baked in interest rate cuts and further falls in inflation now seem less likely. They may go the other way in fact.

I’m not sure when the next speech is due. Yes, there will be times when we want to hear from Government on important things like connectivity and AI that give businesses certainty to invest with confidence, but otherwise, let’s leave businesses to it.