5 changes from May’s government that affect SMEs

by Jul 22, 2016Small Business News

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Last week over the period of 24 hours, it rapidly became clear that Theresa May’s major cabinet reshuffle was going to do more than ruffle a few feathers.

As each MP was summoned to speak with the new PM, it must have felt for many like they were walking towards their political gallows. A week on and that particular bit of political turmoil has calmed to an eddy. But what are the key changes for small business owners and entrepreneurs to come from Mrs May’s new government?

1)     New Northern Powerhouse

Andrew Percy was appointed Minister of Growth and Northern Powerhouse.  He’s perceived as an MP with a history of leaning a little further to the left of his Conservative colleagues.

As it stands 11 areas across England have signed deals with the government to devolve powers away from central Government and Percy expects all those deals to be honoured. But whether more deals will be made for the other 27 areas who applied for similar devolution agreements remains to be seen.

Percy is keen to continue the push for Speed Rail, connecting more northern cities such as Liverpool with Hull.  He also wants to “ensure more people have got access to a proper high speed broadband connection.” Outside of London small businesses would certainly benefit from stronger links, but is this likely to be high up on the list of public spending priorities?

2)     Hammond at the wheel

Thankfully we’re not talking about Top Gear presenters. One of the most discussed cabinet changes but probably least surprising is that of the new Chancellor of the Exchequer Philip Hammond.

His first days have been spent negotiating with China, where he is now, in discussions with the G20 finance ministers in Chengdu. Given that our future position within the single market cannot yet be determined it’s a much needed assurance that securing strong business relations outside the EU is high priority.

More recently Hammond revealed this week that the government would be willing to “reset fiscal policy” if necessary given the decision on Brexit. This could mean any number of things, including more infrastructure spending which could in turn boost UK business.

3)     Industrial Strategy brought to the fore

Greg Clark’s new position may not include innovation and skills as it did for his predecessor, but May appears to be sending a clear message to UK businesses by adding Industrial Strategy to the job title.

As the Financial Times said in their article last week following Clark’s meetings with senior executives from Airbus and Rolls-Royce at the Farnborough air show – “His team and his new title suggest the Treasury will face a new, stronger competing power base for supply-side reforms.”

So far the response from British Industry chiefs to Clark’s new appointment is optimistic. As Terry Scuoler, chief executive of the EEF, the lobby group for UK manufacturers is quoted as saying “We are looking for a minister who will now be strong enough to fight for his department and his budget”.

If this optimism proves to be well founded, small businesses and industries could have a strong contender in their corner.

4)     Slicing & dicing of departments

One of the big changes to come out of the reshuffle is the hiving off of Apprenticeships and Higher Education to the Department of Education.  To some degree it makes sense to remove this from Greg Clark’s remit as new Secretary of State for Business, Energy and Industrial Strategy. Although it sounds contradictory, he actually has greater powers (see point 3).

The main concern some have with this splitting of Apprenticeships is the fostering of new talent for businesses.  A lot of small to medium companies rely on talent coming from the EU or from schemes like Tech City UK – launched by David Cameron in 2010.   If it becomes prohibitively expensive to sponsor talent from overseas, schemes like this will become even more important.


5)     New Crown Rep for Small Business

The appointment of Emma Jones founder of Enterprise Nation, as SME representative for the Crown Commercial Service, although not a position within the government is an important one. She could make a difference to a lot of small business owners, and given that over 99% of all UK businesses fall into the bracket of SMEs, her appointment could have a very real effect on how small businesses fare under May’s government.

Emma’s new role means she’ll be helping small businesses in the UK to bid for and win key government contracts. She’ll also be supporting the campaign to show that “Government is Open for Business” for SMEs. And that communication should go both ways with Emma increasing awareness within the small business sector of opportunities to fulfil government contracts.

There’s an air of optimism surrounding the new government structure and appointments, and it’s one that will need to be nurtured.  It’s still early days as May progresses with her introductory meetings with EU Heads of State, having initially won the support of Angela Merkel and François Hollande, as far as delaying the enactment of Article 50 – at least until next year. But the more important element of how Theresa May’s government is viewed by UK SMEs, will be the product of all those future negotiations yet to occur.

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