Nine in ten want Government to back UK SMEs, says Novuna

Nine in ten people believe the Government should do more to support UK small businesses, according to new research from Novuna Business Finance, as business confidence falls to its lowest level since the first Covid-19 lockdown.

The research found that 90% of UK adults want greater Government support for small businesses, up from 87% following the General Election in July 2024, highlighting growing public recognition of the sector’s importance to the economy and local communities.

The findings come as Novuna’s latest Business Barometer reveals a sharp decline in confidence among SMEs. Just 24% of small business owners expect their businesses to grow over the next three months, down from 28% in the previous quarter and 35% in the months following Labour’s election victory in 2024. It represents the weakest growth outlook recorded since spring 2020.

With confidence subdued, many businesses are focusing on managing costs rather than expansion. Almost four in 10 (39%) said controlling fixed costs was now their main priority, while only 10% are planning to expand into new markets and just 9% intend to recruit additional staff over the summer.

The public identified reducing financial pressures as the Government’s top priority for supporting small businesses. More than a quarter (27%) called for lower business rates, 25% wanted corporation tax cuts for smaller firms, and 22% supported reductions in National Insurance contributions.

Energy costs also remain a significant concern. Following the Government’s announcement that VAT on household electricity bills will be removed from October, 23% of respondents said they would like to see similar protection for small businesses through an energy price cap. A further 23% called for greater investment to regenerate struggling high streets.

Respondents also highlighted the challenges facing businesses trading internationally. Nearly one in five (19%) said they would like the Government to reverse Brexit and rejoin the European Union, while 16% called for reduced bureaucracy for businesses trading overseas.

Looking ahead, investment in skills was also seen as a priority, with 20% of those surveyed calling for increased funding for apprenticeships and wider access to apprenticeship schemes, while 18% wanted more training and development programmes for small business owners and employees.

Jo Morris, Head of Insight at Novuna Business Finance, said: “What stands out from our recent research is that small businesses matter to everyone.

“While our Business Barometer tracks the confidence and growth ambitions of small business owners, our survey of the general public shows just how connected people are to the sector. People deal with small businesses most days, a strong small business sector helps communities work well – and many consumers themselves either run or work for a small business – a sector that accounts for around 47% of total private sector employment.”

She added: “There have been a lot of positive messages of hope in recent weeks, on what is possible. We share the view that small businesses are key to UK economic growth, that high streets need investment and that reducing the tax and cost-of-living burden on small businesses will help them to invest in long-term growth, modernisation of equipment and to invest in job creation.

“Our Business Barometer data reveals a low point for small business growth forecasts this month, but set against these challenges, 66% of small businesses are still committed to exploring new ways to secure future growth. With the right help from Government on tackling rising costs and the tax burden, there is hope for the future.”

The research underlines the pressures facing UK SMEs despite widespread public backing for greater Government support. With hiring intentions and expansion plans remaining subdued, businesses are increasingly focused on controlling costs while waiting for stronger economic conditions to emerge.