Will the New Prime Minister Finally Deliver for UK SMEs?
As the seventh prime minister in a decade steps through the front door of Number 10, Britain’s small and medium-sized enterprises (SMEs) are quite reasonably asking themselves the question: “Will this be the prime minister who finally gets us?”
According to the Office for National Statistics, SMEs account for 99.9% of all private sector businesses in the United Kingdom. This staggering figure underscores the vital role SMEs play as the backbone of the UK economy, driving innovation, employment, and regional growth.
Andy Burnham, taking office as prime minister, is expected to be a new broom and has the opportunity to make a real difference in the business landscape. For years, SMEs have endured a challenging environment marked by high borrowing costs, persistent inflation, supply chain disruptions, and sluggish domestic growth hovering just above or below zero percent.
What do governments often overlook? Our small businesses are the engine of the UK economy, accounting for over 99% of all private sector businesses and supporting millions of jobs. We want to grow because we are the only way the economy can truly expand. The pressing question remains: will our latest prime minister buck the trend and provide the support SMEs desperately need?
As a founder who works daily alongside business owners navigating capital and growth strategies, I observe both clear opportunities and significant policy risks ahead. Here is what SMEs should watch closely in the coming months.
The procurement opportunity
One of the most encouraging developments for UK SMEs is the growing momentum around reforming government procurement. Historically, valuable public sector contracts—worth tens of billions of pounds annually—have been locked behind complex bureaucratic barriers. This has effectively frozen out SMEs in favor of multinational conglomerates with large compliance departments.
Recent policy initiatives aimed at breaking down these barriers recognize that SMEs bring distinct advantages: speed, innovation, and local economic multiplier effects that large prime contractors simply cannot match. Public infrastructure and defence supply chains are gradually becoming more accessible to smaller, agile firms. The UK government’s commitment to expanding SME access to public sector contracts presents a significant opportunity for smaller businesses.
The government acknowledges that SMEs contribute a diverse range of capabilities—from specialized tech providers and advanced engineering workshops to regional logistics and catering firms. The argument for integrating local supply chains has never been stronger.
If the incoming administration doubles down on simplifying tender processes and enforces strict SME spend targets across Whitehall, it could unlock a direct pipeline of predictable, high-value revenue for growing businesses—providing stability and encouraging investment.
Will Burnham unleash the northern powerhouse?
Andy Burnham’s journey to Downing Street has been notably different from the traditional Westminster pathway. Having spent nearly a decade as mayor of Greater Manchester, he brings a reputation for regional economic development, public transport reform, and devolved governance.
For SMEs, this regional perspective offers the possibility of rebalancing economic opportunities. Burnham’s instinct to govern beyond the London-centric model suggests a renewed emphasis on regional transport connectivity, industrial clusters, and devolved business support grants targeted specifically at northern commercial ecosystems—areas that have historically felt overlooked.
Devolution also means that local leaders can tailor business support, skills training, and green transition incentives directly to local industrial needs instead of relying on a one-size-fits-all approach dictated from London.
However, the path ahead is not without challenges. Burnham inherits an economy constrained by tight public finances, limiting the scope for sweeping tax cuts or large-scale state subsidies. Any increase in government revenue will likely need to come from targeted taxation or higher employer contributions—measures that SMEs would prefer to avoid during already difficult times.
Moreover, Burnham must balance his focus on northern industrial hubs without alienating SMEs operating in the Midlands, South East, or those engaged in international trade. A healthy national economy requires all regions firing on all cylinders. Whether the northern powerhouse is truly “unleashed” will depend on Burnham’s ability to maintain momentum and political resolve amid potential resistance from entrenched Westminster interests.
What your business can do right now
SMEs should begin by reviewing their eligibility for upcoming public sector tenders and actively engaging with local enterprise partnerships to understand new procurement guidelines. Strengthening cash flow resilience through diversified financing options, while building strong relationships with regional development agencies, will position firms to capitalize on forthcoming support measures.
By adopting a proactive stance, SMEs can transform political uncertainty into a catalyst for growth—preparing to seize opportunities as government policy evolves under new leadership.
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