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Supporting SMEs Q3 2022

Keeping entrepreneurs happy should be top on the new prime minister’s list

iStock / Getty Images Plus / SouthWorks

Rachel Irvine

CEO, Irvine Partners, EO London Chapter Communications Chair

Pajani Singah

Co-founder Amazonia Impact Ventures & President EO London Chapter

Jane Hales

Co-founder Sapio Research & EO London Accelerator Chair

With SMEs being the backbone of UK businesses, all eyes are on the new prime minister and whether their policies will rejuvenate the economy.

Amidst the worst cost of living crisis in decades, the biggest hike in interest rates in 27 years, energy shortages and a looming recession — it’s hardly surprising that the economy has taken centre stage in the candidates’ messaging.

The driving force of the economy

The new prime minister should heed the wishes of the entrepreneurs who could accelerate the UK into a new phase of sustained prosperity. Entrepreneurs can serve as engines for economic growth and innovation.

Members of the London chapter of Entrepreneurs Organisation (EO) had their say on the new prime minister’s proposed policies such as halting the rise in corporation tax, overhauling business rates and reversal of the National Insurance rise.

Budget plans to affect SMEs

Planned tax reforms were at the centre of Liz Truss’ campaign. Her goal of cutting £30 billion within weeks of taking office — paid for in part by borrowing — has been popular with Conservative party members. She believes these cuts will incentivise investment and tackle the spiralling cost of living, but UK business leaders seem unsure.

EO London Chair, Pajani Singah, and co-founder at Amazonia Impact Ventures is just one entrepreneur concerned by Truss’ spending plans. “There are those who say that continued borrowing means that future generations will be left to deal with today’s economic frailties. While that’s true, it ignores the very real costs of borrowing in the present.”

While her loyalty to outgoing Prime Minister Boris Johnson was appreciated by party members, our members and many other business leaders are unsure her radical cuts will be beneficial to SMEs in the long term.

Consequences of national debt

Jane Hales, co-founder at Sapio Research and London Chair of EO Accelerator, shares concern over Truss. “Sunak is not threatening unaffordable tax cuts,” she says. “He’s also had hands-on experience with the economy for a long time.”

So, would Rishi Sunak’s plans to tackle inflation before implementing tax cuts be a better alternative? Our organisation thinks so. Sunak has crisis experience alongside a background in investing in SMEs, hailing them as ‘the heart of the economy.’

“It has to be Rishi Sunak, as reducing the national debt is high on his agenda,” says Singah. “The state has to bear the cost of servicing debt right now; and that’s money that could be spent on healthcare, education, and investment in entrepreneurial programmes.”

We are a global association of more than 15,000 entrepreneurs. Each member has a business turning over a minimum of USD 1 million in annual revenue. Diverse in gender and ethnicity, as well as industries represented, the EO London chapter provides an insight into what business owners want from the next prime minister.
EO Accelerator is our network for first-stage entrepreneurs. It’s a learning and support network consisting of business owners generating between USD 250K and USD 1 million looking to take their business to the next level.

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