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September 2, 2022

End of the race to Number 10: Industry reactions

As the UK’s Conservative leadership race comes to an end, members of the accountancy profession give their take on the challenges that are in store for the new Prime Minister

Head of ACCA, Glenn Collins:

“While the Covid-19 crisis may have eased, the challenges facing the new Prime Minister are no less acute. Individuals and businesses are again likely to require significant government support to overcome the current financial challenges. Unsurprisingly, our most recent SME Tracker research suggests a sharp decline in both hiring and growth ambitions. The incoming government needs to set out a clear plan to mitigate rising costs facing small firms; prioritise improvements in business-facing government departments such as HMRC, and work to rebuild trust in government and business through reforms to tax and audit.  

“The intense cost pressures facing businesses means cashflow management is crucial. Seeking out the forecasting skills of financial advisors will be an important way for SMEs to weather the economic storm.”

Roan Lavery, FreeAgent Co- Founder & CEO:

“Since the end of the Recovery Loan Scheme provided to businesses throughout the pandemic, there hasn’t really been any further government help for small businesses. Wider non-business specific initiatives that will come into effect later this year – such as a new interest-free loan scheme and a one-off energy grant – look likely to fall a long way short of what small business owners actually need to tackle the cost-of-living crisis.

“SMEs are the backbone of the economy. Due to their nimble and innovative nature, they are also likely to be the businesses that will lead the UK economy back to prosperity. But in order to do this, they require the right support – including better access to finance that can help them through these difficult times.

“I would therefore urge the new Prime Minister to consider introducing a new support scheme specifically for SMEs that can support businesses through the increasing pressures of cost-of-living crisis and the impending recession. The more help we can provide to smaller businesses now, the quicker they will be able to drive the UK’s recovery in the future.”

Kirsty McGregor, founder of The Corporate Finance Network:

“Amidst surging interest rates and skyrocketing inflation, there is growing concern for the future growth of UK SMEs and the overall health of the UK economy. In fact, according to our recurring monthly research, 7% of UK SMEs are expecting to run out of cash in the next 12 months raising significant concern about their survival. “The new Prime Minister needs to focus on extending investment opportunities, which will be crucial to economic recovery as well as sustained growth in the SME sector. Furthermore, while a number of policy measures were previously introduced to spur investment, including the consideration of reforms to capital allowances, the government now needs to build consistency to support small businesses.”

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