Reigniting UK SME growth A letter to the Chancellor ahead of the Autumn Statement

Dear Chancellor Reeves,

As you prepare for your Autumn Budget Statement, we urge you to put the vitality of Britain’s small and medium-sized enterprises (SMEs) at the heart of your economic agenda.

Recent research by Manx Financial Group reveals a stark reality: nearly a third (30%) of UK SMEs have had to stop or pause parts of their business due to a lack of finance. One in ten have been unable to access external funding despite seeking it, while stagnant growth expectations have surged from 25% to 38% in just a year. Yet, these firms remain confident that with the right funding, they could grow by up to 13% in the next 12 months – growth the UK urgently needs.

Global tariff disputes and protectionist trade policies are compounding these challenges by raising input costs and squeezing export margins. However, within volatility lies opportunity. We recommend five practical policy priorities to reignite SME growth and position them to thrive amid global uncertainty:

1) Diversify markets and manage currency risks

Rising US protectionism under an “America First” agenda threatens UK exports but creates opportunities in the EU, Southeast Asia, Africa, and Latin America. Government-backed market access programmes, export credit schemes, and strategic trade missions can support SMEs to pivot towards these regions. At the same time, currency volatility demands better access to forward contracts, multi-currency banking, and hedging tools. Treasury, the British Business Bank, high street banks and alternative lenders should collaborate to widen availability, stabilise cash flow, and protect margins.

2) Strengthen supply chains and digital scalability

Geopolitical tensions, particularly between the US and China, continue to disrupt global supply chains. UK SMEs have a strategic opportunity to position themselves as alternative suppliers to US and EU corporates. Policies that incentivise nearshoring, multi-sourcing, and investment in AI-enabled logistics and real-time tracking will help build resilience. With US immigration restrictions limiting physical expansion, UK digital services exports are becoming more valuable. The UK-India trade deal further boosts prospects: lower tariffs on UK goods like cars and whisky, and cheaper Indian imports such as textiles and jewellery, will unlock billions in bilateral trade. To seize these opportunities, SMEs must adopt scalable, cloud-based models with robust cybersecurity and compliance, ensuring Britain stays export-ready in a digital, globally connected economy.

3) Unlock finance and investment for growth

High borrowing costs and inflexible terms remain barriers to growth. Reforms to reduce credit costs, broaden eligibility for government-backed loans, and accelerate approvals through digital underwriting with alternative lenders will unlock much-needed capital. Extending full expensing to include green technologies, digital infrastructure, and AI adoption, or introducing a targeted investment super-deduction, would further incentivise productivity-boosting investments.

4) Modernise tax and pension frameworks

Replace outdated business rates with a fairer, modernised system that supports physical premises while incentivising decarbonisation and local growth, such as through land value taxation or targeted innovation reliefs. Mobilising DC pension fund capital into UK growth equity, infrastructure, and scale-ups will enhance returns for savers while funding national innovation. Enhanced R&D tax credits for AI, biotech, and clean tech, alongside a Green Innovation Tax Credit modelled on the US IRA, will accelerate private investment in the energy transition.

5) Launch a national digital skills accelerator

Establish a nationwide digital and technical skills accelerator to tackle persistent labour market gaps in high-growth sectors such as digital, AI, engineering, and green industries. This initiative should prioritise investment in advanced technical training, AI literacy, and net zero skills programmes co-designed with employers and industry bodies to ensure relevance and immediate applicability in the workforce. By linking the accelerator to industrial strategy councils and sector deals, skills development will be tightly aligned with the UK’s long-term economic priorities and future growth areas.

Looking ahead

Chancellor, SMEs generate nearly half of all UK private sector turnover. Their stagnation is Britain’s stagnation, but their growth is Britain’s recovery. Your Autumn Budget is an opportunity to act boldly: unlock finance, foster market agility, incentivise investment, and strengthen skills. In doing so, you will transform tariff uncertainty and economic volatility from threats into catalysts for renewed national prosperity. We stand ready to support you in placing SMEs at the centre of Britain’s economic resurgence.