Government 'must take its foot off businesses' throats'

Business confidence in the UK has been fragile for some time now.

And latest data suggests it has slipped further than that, with the direction of travel becoming increasingly concerning.

According to the Institute of Chartered Accountants in England and Wales, its business confidence monitor has recorded five consecutive quarters of negative sentiment.

Meanwhile, a survey by Deloitte found CFO confidence has fallen sharply, dropping from -13 per cent at the end of last year to -57 per cent in early 2026.

More recently, data reported by Reuters showed UK manufacturing optimism fell to -65 in April.

Those figures, though, only tell part of the story.

In my role as a business owner and chair of the Jobs Foundation North East, I regularly speak to businesses.

On a recent visit to Guisborough and East Cleveland, I spent time with employers across the retail, hospitality and food manufacturing sectors, and the themes that emerged were strikingly consistent.

The most significant issue is the cumulative effect of several changes landing at once.

The rise in employer’s national insurance contributions, in particular, is being felt acutely.

For many of the business owners I spoke to, this is a direct and immediate increase in the cost of employing people, at a time when margins are already tight.

That is being compounded by increases in the minimum wage and rising business rates.

Several of the business owners in Guisborough spoke about losing reliefs or facing substantial increases in their rates bills, particularly on the high street.

When combined, these pressures are forcing difficult decisions about hiring, investment and, in some cases, the long-term viability of the business.

There is also a broader challenge around demand.

Business owners are seeing less money in customers’ pockets, and that is feeding through into lower spending across local economies.

It creates a difficult cycle, where rising costs meet weakening demand.

What stood out most during my conversations, however, was the human impact.

Behind the data are business owners who are not drawing a wage themselves, or who are continuing to operate with minimal or no profit in order to keep staff employed and doors open.

That is not sustainable in the long-term, but it speaks volumes about the resilience and commitment that defines the UK’s SME community.

However, resilience should not be mistaken for unlimited capacity to absorb pressure.

The risk is that sustained cost increases, combined with ongoing uncertainty, begin to change behaviour in a more fundamental way.

We are already seeing signs of this, with businesses delaying recruitment, scaling back investment and becoming more cautious in their outlook.

The message from the businesses I have spoken to is not one of despair, but one of realism.

They are not asking for special treatment; they are asking for a more balanced environment that recognises the cumulative impact of policy decisions on small employers.

Improving business confidence is not about a single intervention.

It is about creating the conditions in which businesses feel able to plan, invest and grow with a degree of certainty.

When that confidence is there, the benefits are felt across employment, local communities and the wider economy.

If this Government wants to restore pride in place, to save our high streets and counter rising unemployment, it needs to take its foot off the throat of businesses to help foster an environment where wealth creation is encouraged, not punished.

Kiran Fothergill is director of Pickerings Lifts and chair of Jobs Foundation North East

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