Manx Financial Group calls on Chancellor Reeves to prioritise SME growth

Douglas Grant (pictured), CEO of Manx Financial Group PLC, has issued a formal appeal to Chancellor Rachel Reeves ahead of the Autumn Budget Statement, urging the government to place small and medium-sized enterprises (SMEs) at the forefront of the UK’s economic agenda.

According to new research from the group, nearly 30 per cent of UK SMEs have been forced to halt or scale back operations due to restricted access to finance, with one in ten unable to secure external funding despite actively seeking it. Compounding the concern, the proportion of SMEs expecting stagnant growth has soared from 25 per cent to 38 per cent in the past year. Nevertheless, optimism remains: these businesses believe they could grow by up to 13 per cent in the next year—if supported by suitable funding structures.

Grant emphasized that geopolitical factors such as global tariff disputes and rising protectionism are creating additional pressure on margins and export potential. However, he highlighted that volatility also brings opportunity, proposing five key policy priorities to drive SME-led economic recovery.

1. Market Diversification and Currency Risk Management
With U.S. protectionism on the rise, UK SMEs are being encouraged to pivot toward emerging and established markets in the EU, Southeast Asia, Africa, and Latin America. Grant advocates for enhanced government-backed export credit schemes, market access programs, and strategic trade missions to facilitate this shift. Additionally, he calls for improved access to currency hedging tools, forward contracts, and multi-currency banking services to mitigate exchange rate volatility.

2. Supply Chain Resilience and Digital Export Scaling
Grant notes that current geopolitical tensions—especially between the U.S. and China—present an opportunity for UK SMEs to serve as reliable suppliers to Western corporations. He recommends incentives for nearshoring, multi-sourcing, and adoption of AI-powered logistics systems. The UK-India trade deal, which promises lower tariffs and more competitive imports and exports, is cited as a prime example of a mutually beneficial economic alliance. To capitalise on digital trade growth, SMEs must invest in secure, scalable cloud platforms and maintain strong compliance and cybersecurity standards.

3. Finance and Investment Enablement
High borrowing costs and rigid lending criteria continue to impede SME expansion. Grant proposes reforms including reduced credit costs, broader eligibility for state-backed loans, and the adoption of digital underwriting platforms, especially those used by alternative lenders. He also recommends extending full capital expensing to include green tech, digital infrastructure, and AI adoption, as well as introducing an investment super-deduction scheme to incentivise future-focused capital investment.

4. Tax and Pension System Modernisation
To further stimulate SME development, Grant calls for the replacement of the outdated business rates system with a modernised model that supports physical locations while rewarding decarbonisation. He also urges the mobilisation of defined contribution (DC) pension funds toward UK-based growth equity and infrastructure, boosting both economic productivity and pension returns. Enhanced R&D tax credits for AI, biotech, and clean energy, along with a UK-specific Green Innovation Tax Credit, are among his proposed incentives.

5. Launch of a National Digital Skills Accelerator
Acknowledging the UK’s ongoing skills gap, especially in AI, green tech, and advanced engineering, Grant proposes the creation of a national skills accelerator program. Designed in collaboration with industry, this initiative would focus on practical training in technical, AI, and sustainability domains. By aligning with the UK’s broader industrial strategy, this accelerator would prepare the workforce for future economic challenges and opportunities.

A Call for Bold Action
“SMEs account for nearly half of the UK’s private sector turnover,” said Grant. “Their stagnation signals economic paralysis, but their growth can lead the country’s recovery.” He concluded by urging Chancellor Reeves to unlock finance, foster market agility, boost investment, and address the nation’s digital and technical skills shortage. “By supporting SMEs, the UK can transform today’s uncertainty into a foundation for long-term prosperity.”