After weeks of political turmoil resulting in a resignation from Keir Starmer, many SMEs are left wondering what a change of leadership means for their business.
Andy Burnham is the likely successor of Keir Starmer, who could take office by as early as the 20th of July if uncontested.
The chaos of British politics can be hard for businesses to navigate because uncertainty can be expensive, especially for companies with tight margins.
What does Andy Burnham plan to do in Number 10?
After a dramatic victory at Makerfield and a highly anticipated return to parliament, Andy Burnham is all but certain to be the next Prime Minister. However, with no election campaign or manifesto, he is yet to outline a detailed economic plan for the country.
From what he has made clear in his recent media rounds, Andy Burnham’s proposed policies will likely be felt by SME’s.
The move towards a ‘devolved’ Britain is heavily supported by Andy Burnham, where greater decision making and spending power would be put back into the hands of local authorities.
How could the proposed changes benefit SMEs?
The cornerstone of devolution plans is to introduce regional growth funds which would help local scale-up and start-up businesses outside of London get access to capital.
Local councils would also have greater autonomy on spending, allowing them to prioritise projects that would boost economic growth in the area.
A separate focus is on overhauling procurement rules to make government contracts more in reach for domestic firms, relying less on outsourcing and making it a more level playing field.
The decline of Britain’s highstreets is an area Andy Burnham wishes to reverse with cuts to business rates for independent firms. Instead, the tax burden would be placed on large e-commerce hubs that are typically situated on the outskirts of cities.
Where the government had previously prioritised investment in London and the Southeast, devolution would allow Andy Burnham’s government to correct this pound per capita imbalance. Improved services, infrastructure projects and targeted regional spending would plausibly support the operations of many SMEs.
The ‘Burnham Effect’: a cause for concern?
While political change can bring about new opportunities and the introduction of overdue policies, uncertainty can cost money. SME’s who operate on a much tighter budget than large multinationals feel the knock-on effects much more.
We appreciate there seems to be a never-ending treadmill of changes for SMEs which can be overwhelming and leave you feeling left out of the loop.
Based on what we do know so far, Andy Burnham’s planned changes might offer some potential obstacles for SMEs.
Having validated the concerns of businesses about the rises in National Insurance, he has not laid out a plan to relieve this strain.
For e-commerce companies that rely on large fulfilment centres, the rise in business rates might be absorbed by smaller brands which would then feel the squeeze.
In terms of supply chains, limiting government contracts to British suppliers could reduce competition and result in a potential rise in costs for smaller subcontractors.
What should be done as an SME?
At this stage everything remains a source of speculation, and no one knows for sure what changes are coming and the impact they might have. However, it is important to keep up to date with potential realities to make sure you can prepare.
We will be following the announcements and providing the context of what they mean for you so you can do not have to feel stressed or in a limbo.
If you want to speak to a member of the team for more details about our support and services, please get in touch.
