Mid-sized firms ‘considering leaving UK’ as pressure on Reeves heats up
Around a third of mid-sized businesses are considering leaving the UK in the next two years, a new survey has suggested, as Chancellor Rachel Reeves faces intense pressure to make business-friendly announcements at the Spring Statement.
The Treasury is set to unlock fresh funding for the construction sector with up to £600m to be spent on efforts to get Britain building.
But a new survey of over 100 businesses suggests that low confidence among mid-sized firms – which are seen as key to unlocking growth – could derail Reeves’ plans.
The findings from the business group Business Leader suggest that just under a quarter of medium-sized firms believe the UK is “pro-business”.
Two in five businesses also said that they were scaling back on hiring.
It follows a survey at the end of last year by KPMG and the Recruitment and Employment Confederation (REC) showing an “accelerated decline” in hiring.
Reeves is under pressure to deliver some good news for thousands of companies at the Spring Statement on Wednesday.
Recent research by BDO suggested that mid-sized firms would add two million jobs to the UK economy by 2028, highlighting the importance of them to UK growth.
The survey also suggested mid-sized firms would make up nearly half of the UK’s rise in gross value added (GVA), a key metric used to measure growth.
Exports minister Gareth Thomas praised BDO’s survey, but the latest data by Business Leader is likely to dampen the government’s hopes for growth in the near term.
Firms responding to the survey said increased costs brought by Reeves’ increase to national insurance contributions are sending shockwaves across sectors including hospitality and retail.
Business Leader defined mid-sized firms as those with revenues of more than £3m and staff headcounts exceeding 15 people.
“Our survey paints a stark picture of the outlook for ‘the forgotten middle’ of UK business, highlighting the urgent need for action to help them navigate challenges and grow successfully,” Richard Harpin, the owner of Business Leader, said.
The Confederation of British Industry (CBI) has separately urged the Chancellor to commit to higher spending in research and development at the Spring Statement and make “long overdue changes” on companies’ access to financing.