What Andy Burnham’s economic agenda could mean for SMEs

Andy Burnham has wasted little time setting out his vision for the UK economy since announcing his bid to become prime minister after Keir Starmer's resignation. 

In his first major economic speech, he pledged what he called the biggest redistribution of power in modern British history. At the centre of this plan is a new ‘Number 10 North’ that would give regions greater influence over economic decision-making. 

Alongside plans to devolve more powers to local leaders, Burnham promised: 

• A major programme of council house building
• Reform of business rates to support the high street
• Greater investment in vocational skills and apprenticeships
• Policies designed to spread economic growth beyond London and the South East

Much of that vision rests on the idea that stronger economic growth comes from devolving power to cities and regions – giving local leaders greater influence over the skills, infrastructure, and investment their economies need. 

For many SMEs, particularly those outside the capital, that agenda will sound familiar and potentially encouraging. A greater focus on regional investment and local decision-making could help ensure support fits the needs of businesses in different parts of the country. 

What could this mean for your business? 

Burnham's speech was a statement of direction rather than a detailed economic plan, with little said about funding or timings. 

For now, businesses and investors are taking a wait-and-see approach. His commitment to the government's fiscal rules has provided some reassurance, but the real test will be how quickly proposals become policy. 

Rather than getting caught up on the politics, SMEs are likely to ask three practical questions. 

1. Will it reduce my costs? 

Business rates remain one of the biggest fixed costs for many retailers, hospitality businesses, and firms with a physical presence. Reform could ease pressure on cash flow, free up money to invest, and make expansion easier. Burnham’s ambition to revitalise high streets could also benefit local businesses. But for now, the detail of any changes is still to come. 

2. Will it make it easier to recruit and grow? 

Many employers continue to grapple with rising wage bills, higher employer National Insurance costs, and persistent skills shortages. 

Burnham has placed vocational education and apprenticeships at the heart of his economic agenda, while greater devolution could give local leaders more control over employment support and training. If delivered effectively, that could create programmes that better reflect the needs of local employers. 

Construction firms and their supply chains will also be watching closely. A large-scale council housebuilding programme could create opportunities across housing, manufacturing, and infrastructure if projects move from announcement to delivery. 

3. What should I do while I wait? 

The direction of travel may be encouraging, but policy announcements are only the beginning. Consultation, legislation, funding, and implementation all take time before businesses feel the impact. 

Businesses can usually adapt to higher costs if they know what those costs will be. What makes planning difficult is uncertainty. Should you recruit now or wait? Invest in new equipment today or six months from now? Expand before or after business rates are reformed? 

Periods of political change, combined with wider economic and geopolitical uncertainty, mean many businesses are likely to delay major decisions until the policy landscape becomes clearer. 

As a consequence, firms may choose to hold larger cash reserves. That’s often a sensible response. Healthy liquidity gives you the flexibility to absorb unexpected costs, seize new opportunities, or weather changing trading conditions. But keeping more cash on hand doesn't mean it should sit dormant in low-interest accounts. 

Grow your business cash while you wait 

If you’re holding larger cash balances while policy develops, now is a good opportunity to review where you hold those funds.  

Ask yourself: 

• Is your business cash earning a competitive rate of interest?
• Can you access funds quickly if circumstances change?
• Does your cash segmentation strategy give you both flexibility and security?
• Have you reviewed your cash strategy recently, or has it simply evolved over time?

Rather than leaving surplus cash in a low-interest current account, a more proactive approach to managing reserves can pay off. Platforms like Flagstone give you access to multiple savings accounts through a single application, helping your funds earn a competitive return while remaining readily available when you need them. 

Periods of policy change are a useful reminder to review your financial resilience. While politicians shape the economy, making sure your cash deposits benefit from FSCS protection, while earning competitive interest, is one decision you can make today.

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