Almost 25% of SMEs have considered closing following mini budget

By Amelia Isaacs on Monday 10 October 2022

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Despite a new array of measures laid out by the government, 41 per cent of businesses said none of them would help.

Almost 25% of SMEs have considered closing following mini budget
Image source: Pexels.

It has been just a few weeks since Kwasi Kwarteng’s emergency “mini budget” full of promises, and there have already been u-turns, cancelled u-turns and a now infamous “anti growth coalition”.

Now, perhaps unsurprisingly, more than 70 per cent of small businesses are saying the budget has failed to boost their confidence.

According to a recent Tide survey of almost 2,000 of its SME members, energy bills are still the biggest issue they face.

Nearly half (49.9 per cent) of the businesses said fuel and energy costs are still their biggest concern – just marginally down from 57.2 per cent this summer despite the government setting out a six month energy support package.

33 per cent of SMEs are now considering a long-term switch to renewable energy, while 20.7 per cent have considered getting advice around reducing their business’s energy consumption, amid rising energy costs.  

“While the energy support package has had some positive impact for small businesses, more needs to be done to help them,” Tide CEO Oliver Prill said.

Many of the measures announced in the mini-budget were aimed at larger companies, he noted.

Inflation concerns are also growing.

26.2 per cent of SME owners said inflation is their biggest financial concern, up from 22.4 per cent in June.

Reducing energy prices (32.2 per cent) and inflation (23.8 per cent) are the two biggest things that small business owners say would help them run their businesses better during the current cost of living crisis.  

“There have been interesting ideas floated about reducing the regulatory burden on small businesses, however, we urge the Government to look at specific actions to help small businesses, such as VAT relief, and provid[ing] help to switch to renewable energy,” Prill said.

The macro economic situation has resulted in a “worryingly high” number of small businesses considering closing, particularly in Scotland and Wales.

24.1 per cent of owners have considered closing their business – rising to more than 30 per cent in Scotland and Wales.

“Unless we see significant improvements in the cost of energy and inflation reduction, any government intervention will not create the kind of growth in the SME sector ministers say they want,” Prill added.

Despite a number of new government measures being introduced, 41 per cent of SMEs said that not a single one will benefit them and their business.

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