Small businesses need to see a pro-enterprise strategy from Government

With economic growth stagnant and the tax burden at a record high, this Budget needed to send a clear message that supporting enterprise is the fastest and most sustainable way to restore prosperity.

Instead, too many of the measures unveiled risk reinforcing the cycle we have warned about for some time - an economic doom loop where sluggish growth leads to higher taxes, which in turn dampens investment and confidence, weakening growth further. In Northern Ireland, small businesses are the backbone of our economy. They create jobs, they innovate, and they fuel our local communities. Yet the Budget introduced new obstacles at precisely the moment when firms need breathing space.

Hikes to dividend taxation show once again that reinvesting in your own business remains one of the least tax-efficient things an entrepreneur can do. For many small company directors, this is not a tax on wealth, but a tax on taking risk. At a time when we need small firms to invest to grow, these measures do the opposite. Similarly, plans to charge employers more for supporting workplace pension savings amount to yet another cost pressure on small firms already struggling with wage inflation, high energy costs, supply chain disruption and increased regulation. These proposals may appear small individually, but together they erode margins and suppress the confidence needed to hire and expand.

If the UK Government genuinely wants to change the economic trajectory of the UK, then the Budget must be the starting point, not the conclusion. What is needed urgently is a programme of serious, pro-growth policies that restores confidence and encourages small firms to invest, innovate and employ. Without this we will be back here next year facing the same challenges, with further tax rises used to plug gaps rather than generate prosperity.

That said, for Northern Ireland there was a step forward, and one for which FSB has long campaigned. The Chancellor’s confirmation of £16.6 million of funding for a new ‘one stop shop’ support service to help SMEs navigate the Windsor Framework is welcome. This development reflects months of intensive engagement by FSB with ministers, officials and politicians across the UK, following publication of our Windsor Framework Realities report in June.

In that report, one of our core recommendations was the creation of a simple, centralised support mechanism to equip small firms, both in Northern Ireland and in Great Britain, with the clarity, guidance and practical help they urgently need. The Government’s decision to act is both a recognition of the problem and a testament to the persistence of the small business community demanding solutions.

This will not, of course, be a quick fix. The complexity of the trading arrangements affecting Northern Ireland will not evaporate overnight. However progress begins with acknowledging reality, and on that front the announcement is a meaningful step. It is also encouraging that the Chancellor has described this issue as “an absolute priority”, signalling a willingness to keep momentum behind reforms. Northern Ireland’s small businesses are resilient, ambitious and ready to grow, but they cannot do it alone.

The Budget demonstrated just how important it is for the Government to move beyond tax-raising exercises and towards a genuine pro-enterprise strategy. Our message is clear for 2026 – match words with action, deliver a credible growth plan, and empower small businesses to do what they do best, and that is to drive economic success.