For all of Labour’s grandstanding, half of SMEs say it’s become harder to turn a profit under Labour, writes Danielle Dunfield-Prayero
The Conservatives were booted out of office in July 2024. Some voters wanted change. Others believed Labour could deliver something better – including many in business, who had been courted by Keir Starmer and Rachel Reeves for years.
Labour swept to power with a stonking majority. Fifteen months on, how are things going?
Last week in Liverpool, the Chancellor delivered a speech that set alarm bells ringing – preparing the ground for further tax rises on hardworking people. For many small and medium-sized businesses (SMEs), this was a cold reality check. A long winter looms for the firms that power our local economies.
New Opinium polling commissioned by Conservatives For Business (CFB), a non-affiliated platform giving SMEs a stronger voice, reveals a double crisis: collapsing confidence and rising costs.
First, the confidence collapse: 59 per cent of SME leaders lack confidence in the UK economy, 57 per cent in the country’s direction and nearly a quarter doubt their own business’s future. That’s one in four high street shops, cafes and hairdressers.
And second, the costs crisis: 51 per cent say turning a profit has become harder since the election, 41 per cent describe business taxes as unaffordable and 38 per cent cite soaring energy costs as a major concern.
It’s no wonder that while Labour still claims to champion small business, many owners – including those we’ve spoken to in Manchester – feel neglected or, worse, treated as cash cows. Perhaps the city’s representatives should spend less time chasing promotion and more time backing local firms in retail, hospitality and leisure across the Northern Quarter and beyond.
The Conservatives are still the number one choice for big businesses
As the Conservatives gather in the birthplace of the Industrial Revolution for their conference – and as Business Day celebrates the entrepreneurs and employers who drive growth – it’s time to reflect on what’s gone wrong and how to put it right.
The good news is the Conservatives are rediscovering their roots – reminding both themselves and the business community why a centre-right party is best for business.
Polling shows that when it comes to supporting large companies, the Conservatives lead Labour by seven points (26 per cent vs. 19 per cent). Among small and local firms, they’re neck and neck at 20 per cent each. And when asked which party is “most interested” in SMEs, the Conservatives – alongside Reform – top the list at 51 per cent, ahead of Labour on 43 per cent.
Reform’s populist promises and fiscal fantasy economics are just another side of the same big-government coin. Meanwhile, the Lib Dems’ everything-everywhere-all-at-once localism offers plenty of promises but little delivery. There’s a reason their posters resemble hazard warning signs.
The Conservatives’ improving position is no accident. The Party – alongside CFB – has been listening to SMEs and asking what’s needed to help them survive and grow. The answers are clear: lower energy costs, cut business taxes, slash red tape and a coherent, credible long-term economic plan. Only then can the UK rebuild confidence and reverse the current malaise.
Yet it’s not all doom and gloom. Britain’s entrepreneurs remain resilient. Despite mounting pressures, two-thirds of SME leaders would still recommend starting a business to a young person today. That optimism – that determination – is the British “can-do” attitude in action.
SMEs make up over 99 per cent of private sector businesses, employ 60 per cent of the workforce and generate 52 per cent of annual turnover – a staggering contribution. When they thrive, the UK thrives.
Backing SMEs isn’t just about economics – it’s about restoring confidence, stability and opportunity nationwide. Labour’s current approach is failing all three.
Before the Conservatives can restore confidence in others, they must first rediscover it in themselves – and in the enduring principles that make them the only credible party for business: small government, lower taxes and the freedom to take risks and grow.
For the sake of the businesses that keep Britain’s cogs turning, it’s time to restore confidence, cut costs and champion the spirit of enterprise. The SMEs that can power a stronger economy deserve nothing less.
Danielle Dunfield-Prayero is chair of Conservatives For Business