Now that election fever has died down and the new Government is in place and ready to march forward with its plans, Philip Brennan, head of businesscomparison.com takes a look at what SMEs can expect from the changes.
- We’re hoping for a confident market. The FTSE rose dramatically on the result of the election, as many traders had been worried about how a change of Government would affect to the British economy. Concerns had been raised about how Labour in particular would handle reducing the deficit, which the previous Government had been seen by some to be managing effectively. However the Conservative party will need to manage its fledgling relationship with the SNP to ensure a smooth course moving forward
- Exchange rates have risen for the reasons mentioned above, which need to be monitored carefully in the coming months. Whilst the increase might be positive for holiday goers, the rising pound will hurt our exports, with British made goods costing more overseas, meaning a loss of margins. This is especially true for many SMEs that may already find exporting a significant challenge
- The new Government made a pledge prior to the election for a referendum on Europe, which could be a worry for those business reliant on exports to the continent. Small businesses which export do 87 per cent of their business in Europe, compared to the next highest of 47 per cent in the USA. New trade agreements could affect their ability to be completive
- We think the following will prove to have a positive impact for SMEs and are eager to see how this plays out in the near future
- Legislation to stop late payments, which will help SMEs with their cash flow. One of the biggest reasons small businesses fail is due to late payments so it’s encouraging to see new legislation in this area
- Startups will be exempt from National Insurance contributions on the first ten employees for two years. This offers them more money to plow back into their business, helping to sustain and build growth at such a crucial time in their development
- Investment in infrastructure, such as HS2 and superfast broadband. This will truly help SMEs across the whole country, not just those centered around big cities, to establish and grow their businesses
Only time will tell how much of a positive impact the new Government will have on SMEs but the initial outlook seems bright and should offer businesses confidence for the future.