Andy Burnham takes the reins, but can he deliver for Britain’s small businesses?

Andy Burnham’s first week as Prime Minister has brought promises of business rates reform, greater devolution and stronger support for small and medium-sized enterprises (SMEs). But after years of policy uncertainty, rising costs and squeezed margins, Britain’s 5.5 million SMEs will judge the new government on delivery rather than promises.

A new face in Downing Street

Andy Burnham arrived at Number 10 on 20 July promising a major shift in how Britain is run. His message was clear: less power concentrated in Whitehall, more support for the regions, and a government that understands the pressures facing businesses beyond London.

For Britain’s 5.5 million small and medium-sized enterprises (SMEs), words alone will not be enough. After years of changing policies, rising costs and uncertainty around tax, many small business owners will be waiting to see whether this new government can deliver practical help rather than another round of announcements.

Small businesses account for more than 99% of UK businesses and employ millions of people across every sector of the economy, making government policy on taxation, investment and regulation especially significant.

A different political style

Burnham’s first speech as Prime Minister struck a deliberately different tone. Standing outside Downing Street without notes, he said he would be a “pro-business leader of the Labour Party”, just as he had been a pro-business mayor in Manchester. It was a confident statement, and one that will resonate with business owners who have seen how Greater Manchester has used devolution, transport reform and local investment to drive growth.

His arrival followed Keir Starmer’s resignation and Burnham’s by-election victory in Makerfield. After nine years leading Greater Manchester, Burnham comes into office with experience of working directly with regional businesses and local leaders. That background could prove important, particularly for firms that feel national policy too often overlooks the realities of running a business outside the capital.

What Andy Burnham has promised UK SMEs

In his first address, Burnham talked about building a new economic model, devolving power and giving people and businesses “some breathing space”. For SME owners dealing with higher payroll costs and tighter margins, that language will be welcome. The real test, however, is whether it translates into lower costs, clearer regulation and greater confidence to invest.

The government has already announced several early policy measures. On 23 July, it confirmed a 20% cut in business rates for pubs, clubs and live music venues in England from April 2027. The measure is expected to benefit almost 32,000 businesses, with a typical pub saving around £1,100 in the next financial year.

The government also said it would take action against online marketplace sellers that do not meet their tax obligations. That will be welcomed by high street firms that have long argued they are competing on an uneven playing field.

Other early measures include a £2 bus fare cap outside London and a cut to VAT on electricity bills. These changes may not directly transform every SME, but they could ease pressure on employees and customers, both of which matter to local firms.

Reaching out to the SME community

On 24 July, Burnham spoke directly with business organisations including the Federation of Small Businesses, British Chambers of Commerce, Small Business Britain, Enterprise Nation and the Startup Coalition. He promised greater certainty, quicker decision-making and a stronger business voice in policymaking. He also pointed to plans to reform business rates, reduce youth unemployment and improve public procurement opportunities for British firms.

The government has also created a new Department for Business, Innovation, Science and Trade, bringing together science, technology and economic policy. Lord Leong has been appointed Small Business Minister, another indication that SMEs are expected to be a central part of the government’s agenda.

How business organisations have responded

Business leaders remain understandably cautious. A Simply Business survey of 232 small-business readers found that 49% did not believe a new Prime Minister would be good for small businesses. Just 13% thought it would be, while 29% said it was too early to judge.

The business rates announcement received a mixed response. Tina McKenzie, Policy Chair at the Federation of Small Businesses, welcomed the change but said it should be only the first step towards more substantial reform. She called for a significant increase in Small Business Rates Relief in the Autumn Budget.

Hospitality businesses outside the pub sector are also waiting for clarity. Restaurants and hotels were not included in the 20% rates cut, prompting UKHospitality Chair Kate Nicholls to call for wider support. JD Wetherspoon founder Tim Martin described the move as positive but modest, while repeating calls for a 10% VAT cut for hospitality, a policy that has yet to appear in the government’s plans.

Why delivery matters more than headlines

For many SMEs, stability may matter more than any single tax cut. Derek Ryan, CEO for North West Europe at Bibby Financial Services, said last year’s increase in National Insurance contributions had stalled investment and growth plans for many small firms. Any move to reduce that burden would make a real difference, he said, but much will depend on the detail and the approach taken by the Chancellor.

There are also questions about how the government will fund its plans. The £2 bus cap was initially linked to scrapping the Digital ID scheme, a proposal questioned by former Treasury minister Darren Jones. The VAT cut on electricity bills has raised similar concerns. Burnham has committed to sticking to fiscal rules, so he will need to demonstrate that his promises are affordable as well as politically popular.

The devolution opportunity

Where Burnham’s approach feels most distinctive is in his focus on devolution. His experience in Greater Manchester has shaped a belief that local areas should have more control over investment, infrastructure and economic development. His proposed “Good Growth Funds”, based on Greater Manchester’s model of bringing public and private investment together, could offer a major opportunity for SMEs across the country.

This could be particularly valuable for SMEs operating in construction, housing supply chains and local services. A large-scale council housebuilding programme and greater regional investment would create demand across a range of sectors. Burnham’s proposed “Number 10 North” may be partly symbolic, but it reinforces his message that government should not be run solely from Westminster.

Backing skills and innovation

His plans for an “Innovation Nation”, supporting entrepreneurs, scientists, technologists and creatives, could also help address the skills shortages that continue to hold many growing businesses back. A greater focus on vocational qualifications and apprenticeships alongside university education would be especially welcome for employers struggling to recruit.

For UK SMEs, the biggest policy areas to watch over the coming months are business rates reform, National Insurance, regional investment, public procurement and the Autumn Budget.

What small businesses should watch next

It is too early to judge Burnham’s government after only one week in office. However, he has made a purposeful start by engaging with business groups, appointing a dedicated Small Business Minister and announcing measures intended to ease some immediate pressures.

The bigger decisions are still to come. Business rates reform, National Insurance, hospitality VAT, regional investment funds and the wider shape of the Autumn Budget will determine whether the government’s early promises lead to lasting change.

Small businesses have heard ambitious plans before. What they need now is consistency, clarity and a government that follows through. Whether Andy Burnham’s government succeeds will ultimately be judged not by announcements, but by whether UK SMEs experience lower operating costs, greater certainty, improved access to investment and stronger opportunities for growth.

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