Chancellor announces pay rise for over 3 million workers next year, as National Living Wage rises by 6.7%
Pay boost worth £1,400 a year for an eligible full-time worker – a significant move towards delivering a genuine living wage.
18-20 National Minimum Wage will rise by £1.40 per hour – the largest increase on record – and marks first step towards a single adult rate.
Over 3 million workers will receive a pay boost after the Chancellor confirmed the National Living Wage will increase from £11.44 to £12.21 an hour from April 2025.
The 6.7% increase – which is worth £1,400 a year for an eligible full-time worker – is a significant step towards delivering the manifesto commitment to make sure the minimum wage is a genuine living wage.
The National Minimum Wage for 18 to 20-year-olds will also rise from £8.60 to £10.00 an hour – the largest increase in the rate on record. This £1.40 increase will mean full-time younger workers eligible for the rate will see their pay boosted by £2,500 next year. This marks the first step towards aligning the National Minimum Wage and National Living Wage to create a single adult wage rate, which would take place over time.
The move comes ahead of today’s Budget which will ‘fix the foundations’ to deliver change by fixing the NHS and rebuilding Britain, while ensuring working people don’t face higher taxes in their payslips.
It builds on the commitment to be a pro-business, pro-worker, pro-growth Government – delivering a key plank of the Plan to Make Work Pay, which is already set to boost the pockets of the lowest-paid workers by up to £600 a year through the Employment Rights Bill.
The plan will boost productivity, creating a workforce that is fit and ready to help us deliver our first mission to kickstart economic growth – with good jobs and growth in every part of the country making everyone, not just a few, better off.
Chancellor of the Exchequer Rachel Reeves said:“This Government promised a genuine living wage for working people.
“This pay boost for millions of workers is a significant step towards delivering on that promise.”
Business Secretary, Jonathan Reynolds said: “Good work and fair wages are in the interest of British business as much as British workers.
“This government is changing people’s lives for the better because we know that investing in the workforce leads to better productivity, better resilience and ultimately a stronger economy primed for growth.”
Deputy Prime Minister, Angela Rayner said: ““A proper day’s work deserves a proper day’s pay.
“Our changes will see a pay boost that will help millions of lower earners to cover the essentials as well as providing the biggest increase for 18–20-year-olds on record.”
The minimum hourly wage for an apprentice is also boosted next year, with an 18-year-old apprentice in an industry like construction seeing their minimum hourly pay increase by 18.0%, a pay bump from £6.40 to £7.55 an hour.
These increases will mean 3.5 million workers will receive a pay rise this year in total. They confirm the Low Pay Commission’s recommendations, whose advisory remit was overhauled by ministers in July to consider the cost of living.
Ethics Director at Lush Cosmetics, Hilary Jones said: ““Lush staff making and selling our products are crucial to our success, so we commit to the Living Wage Foundation’s independently calculated real living wage rates each year to feel confident our rates of pay are fair and that our staff can afford what they need to thrive, not just survive.
“In these tough times where the cost of living continues to rise, it is great to see the Government increase minimum wage closer to these calculations to support the hardest working and most vulnerable workers across the UK.”
Chair of the Low Pay Commission, Baroness Philippa Stroud said:“The Government have been clear about their ambitions for the National Minimum Wage and its importance in supporting workers’ living standards.
“At the same time, employers have had to deal with the adult rate rising over 20 per cent in two years, and the challenges that has created alongside other pressures to their cost base.
“It is our job to balance these considerations, ensuring the NLW provides a fair wage for the lowest-paid workers while taking account of economic factors. These rates secure a real-terms pay increase for the lowest-paid workers. Young workers will see substantial increases in their pay floor, making up some of the ground lost against the adult rate over time.”
Good news for low paid workers, then. but some businesses – small businesses remain the bedrock of the UK economy – point out that it’s not the government that will be paying the pay rises, it’s them.
Coming on top of the likely increase in employers National Insurance contributions likely to be announced today they say that these additional costs could force some small businesses, working on small profit margins, to close.
New package of measures aimed at tackling scourge of late payments
New Fair Payment Code and fresh rules on company reporting and major consultation unveiled as part of package to tackle late payments
Scourge of late payments costs SMEs £22,000 a year with 56 million hours of lost productivity across the economy – acting as a major brake on growth
Comes as Business Secretary set to visit food and drink businesses in Manchester struggling with late payments
The government has unveiled new measures today to support small businesses and the self-employed by tackling the scourge of late payments, which according to the Smart Data Foundry is costing small businesses £22,000 a year on average and leads to 50,000 business closures a year according to Intuit QuickBooks,
The government will consult on tough new laws which will hold larger firms to account and get cash flowing back into businesses – helping deliver our mission to grow the economy.
In addition, new legislation being brought in the coming weeks will require all large businesses to include payment reporting in their annual reports – putting the onus on them to provide clarity in their annual reports about how they treat small firms. This will mean company boards and international investors will be able to see how firms are operating.
Enforcement will also be stepped up on the existing late payment performance reporting regulations which require large companies to report their payment performance twice yearly on GOV.UK.
Under current laws, responsible directors at non-compliant companies who don’t report their payment practices could face criminal prosecutions including potentially unlimited fines and criminal records.
The consultation which will be launched in the coming months, will also consider a range of further policy measures that could help address poor payment practices.
Every quarter, 52% of SMEs in the UK suffer from late payments according to FSB, meaning roughly 2.8 million small firms face this issue, with the Federation of Small Businesses describing it as one of the biggest problems facing SMEs.
Late payments are just one element of the problem, with some SMEs forced to wait months for contracts to be fulfilled and some are even forced to take out loans against their own homes to manage cash flow.
Cracking down on late payments will unlock growth for 5.5 million small firms by enabling them to invest their time hiring more employees, boosting wages, and exporting around the world, rather than chasing down late payments.
The Business Secretary will hold a joint call with the Federation of Small Businesses later today to outline to SME leaders the work the Department will undertake to put in place tough new laws to end bad payment culture.
New proposals, subject to consultation, will be bought forward on audit and audit committees, in order to help rebuild small businesses’ trust that they will be paid on time and to deliver on Labour’s manifesto commitment to tackle late payments.
Prime Minister Keir Starmer said: “We’re determined to back small businesses by unlocking their barriers to growth, and stamping out late payments is at the heart of this.
“We know how important it is for business owners to have the peace of mind and certainty around their cashflow to keep their businesses alive. Late payments cost businesses tens of thousands of pounds and is one of the biggest reasons businesses collapse.
“After years of delay, we’re bringing forward measures that small businesses have long been calling for to tackle late payments once and for all.”
Business Secretary Jonathan Reynolds said: “Late payments are simply unacceptable and this government is determined to level the playing field for small business. When the cashflow runs dry, small firms go under which is why we need to hold larger business to account with their payment practices and foster an environment that supports growth and jobs.
“Slashing trade barriers, reforming business rates, getting more SMEs exporting – this government is committed to small firms. We know there’s a lot more to be done, but today we are calling time on late payers once and for all.”
A new Fair Payment Code has also been announced today replacing the old Prompt Payment Code, and will be open to signatories this autumn. Businesses will need to prove they have met good payment standards before being awarded official code status.
This will be designed to push businesses to pay faster more often, to be awarded either gold, silver or bronze status. The Code will also shine a light on those responsible businesses doing the right thing by their suppliers and small firms.
It comes as part of our wider work to support SMEs to help go for growth with reform to business rates, getting more small firms exporting and our new industrial strategy. The Secretary of State and Small Business Minister Gareth Thomas will discuss the new measures with small businesses later today.
Small Business Minister Gareth Thomas said: “Small businesses deserve to be paid on time, it’s as simple as that. I’m optimistic that today’s first big step will help pave the way for real change that supports SMEs to thrive and help to grow our economy.“
New research published by the Department for Business and Trade has found payment problems multiply the further down the supply chain you go.
With delays to payments increasing with each business along a supply chain, this results in smaller businesses generally experiencing more issues with late invoices than larger firms.
These new findings underpin the need to move quickly to crack down on late payments. The research also found that there was a clear imbalance between big and small firms, and that administrative errors are a major factor in creating slow payments with 24% of firms saying that invoices being incorrectly handled added to delays.
The government will work closely with small and large businesses as well as groups such as FSB and Enterprise Nation to discuss what further measures can be considered to crack down on late payments while ensuring we strike the right balance and avoid excessive burdens on businesses.
Tina McKenzie, Policy Chair at the Federation of Small Businesses (FSB), said: “This is what real change looks like. Listening to small firms and prioritising action to tear down each and every barrier to growth.
“The Business Secretary has clearly recognised the importance of eradicating bad payment culture, which so devastates the UK supplier base and holds back growth. This series of actions today – including the crucial steps being taken to deliver on Jonathan Reynolds’ commitment on audit committees – shows the Government is rightly focused on delivery and working in partnership with the business community.
“There will be so many decisions the Government needs to get right, early – an actively pro-small business budget, a good industrial strategy and tackling late payment. Announcing this programme of work today is a huge confidence boost for the small business community and a clear signal the new Government intends to stand up for small firms.”
The Small Business Commissioner, Liz Barclay, said: “I am delighted to announce a new Fair Payment Code will be launched this autumn. The new code will reward businesses that treat their suppliers fairly and pay them quickly. It will also include an ambitious new Gold Award which aims to make 30-day payments the new standard for which businesses can aim.
“We need sustainable, resilient businesses at all levels of the supply chains, to achieve the growth the economy needs. That means paying everyone from the largest supplier to the sole trader quicker, so they have the confidence to invest, improve productivity and grow. Fair payment terms and on time payments are the key.”
Steve Hare, CEO of Sage, said: “Late payments continue to challenge small and medium-sized businesses, affecting cash flow and growth. The UK Government’s new measures are all positive and show a strong commitment to addressing this issue.
“We must also focus on technological solutions. E-invoicing, for instance, already used in other countries, reduces late payments by 20% and processing times by 44%, saving small companies an average of £11,300 annually.”
Oliver Lloyd-Taylor, Founder of Black Milk, which has a Manchester-based café and sells award-winning pistachio & hazelnut spreads, said: “As a company we have experienced firsthand the sequential impact of late payments to our daily cash flow – which has, at times, lead us to be late with payments ourselves.
“We welcome the steps that the Government is making today to help protect small businesses, especially safeguarding them from larger businesses being able to utilise smaller businesses as an overdraft facility.”
Kenny Goodman, co-founder of drinks company Hip Pop said: “Late payments can significantly impact small businesses like ours, especially when it comes to maintaining strong relationships with our suppliers.
“When we’re paid on time, we can ensure we do the same for those we work with, which is vital to keeping everything running smoothly.”
Terry Corby, Founder & CEO of campaign group Good Business Pays said: “On the same day that Good Business Pays published our Autumn 2024 Watchlist of Late & Slow Paying companies, it’s encouraging to see these new late payment measures being announced.
“Only reputational pressure from organisations like Good Business Pays, supported with appropriate legislation and enforcement from government, will force a change in late payment behaviour. These new measures announced today will go some way to help drive that culture change.”
Despite improved transparency, a Parliament committee has found that inconsistency, bureaucracy, and inflexibility are still creating challenges for small businesses and third sector organisations looking to participate in public procurement.
A decade on from the introduction of the Procurement Reform (Scotland) Act 2014 (the Act), Holyrood’s Economy and Fair Work Committee has explored how the Act is operating.
Intended to support economic growth with procurement systems which were transparent, fair and business friendly, the Act put in place regulation for public procurement contracts above certain financial thresholds.
During its inquiry, the Committee heard from businesses and the third sector, as well as local authorities and the Scottish Government.
The Committee found that while the Act’s improvements to transparency were welcomed, there were still challenges which made navigating public procurement difficult, with one witness giving the Act a “C+ for its performance.”
Challenges experienced by witnesses included inconsistency across contracting authorities and heavy bureaucratic load.
The Committee’s report makes a number of recommendations to improve the system including:
Ensuring that the Public Contracts Scotland website is updated to make it once again “best in class”.
The Scottish Government should work with contracting authorities to drive consistency and reduce administrative burden.
A uniform process for the provision of feedback should be developed.
Speaking as the report launched last week, Committee Convener Claire Baker MSP said:“Public procurement plays a vital role in the Scottish economy, involving small business, the third sector and public bodies.
“But with more than ten years now passed since the Act came into force, it is time to reflect on whether the ambitious aims are being met.
“There is no doubt that the Act has had a positive impact on increasing transparency of procurement processes which of course is to be welcomed. But for too many businesses, especially new or small businesses, there is still confusion and inconsistency. all of which is causing a barrier to those who may want to engage.
“Our report calls for a number of changes which would have a real impact to ensure that the bureaucracy and inflexibility can be addressed.”
During its inquiry, the Committee also found that the Act had contributed to an increase in Scottish procurement. However, the report makes clear that the Committee believes more can be done to increase local procurement.
The Committee noted the results from the community wealth building pilot areas and called for the principles and lessons learned to be fully embedded in procurement processes.
Major package of reforms to support small businesses in PM’s first economic speech since the Spring Budget
£60 million new investment to enable up to 20,000 more apprenticeships, including for young people and small businesses
Unnecessary regulatory burdens to be slashed through Brexit freedoms saving around £150 million per year for thousands of small businesses
New taskforce to be established to boost private investment in women-led businesses and make the UK the best place in the world to be a female founder
In his first economic speech since the Spring Budget, the Prime Minister is expected to set out a major package of reforms to support businesses to deliver more apprenticeship places, cut red tape for SMEs and leverage more private investment in female founders at the Business Connect conference in Warwickshire today.
The UK Government will fully fund apprenticeships in small businesses from 1st April by paying the full cost of training for anyone up to the age of 21 – reducing costs and burdens for businesses and delivering more opportunities for young people to kick start their careers.
This will remove the need for small employers to meet some of the cost of training and saves time and costs for providers like further education colleges who currently need to source funding separately from the government and businesses.
The move is underpinned by an additional £60 million of new government funding for next year, guaranteeing that where there is demand for apprenticeships from businesses, the government will ensure there is enough funding to deliver them.
From the start of April, the government will also increase the amount of funding that employers who are paying the apprenticeship levy can pass onto other businesses. Apprenticeships can currently be funded by a levy paying employer transferring up to 25% of their unused levy to a different employer.
Under the new measures, large employers who pay the apprenticeship levy will be able to transfer up to 50% of their funds to support other businesses, including smaller firms, to take on apprentices. This will help SMEs hire more apprentices by reducing costs and enabling more employers to get the skilled workers they need while unlocking more opportunities for young people in a huge range of sectors, industries, and professions.
Hundreds of large levy-paying employers have already taken advantage of the opportunity to transfer their unused levy funds to other businesses. As of [December 2023], 530 employers including ASDA, HomeServe and BT Group have pledged to transfer over £35.39 million to support apprenticeships in businesses of all sizes since September 2021.
Taken together, these measures are expected to enable up to 20,000 more apprenticeships, primarily for young people, and is part of our plan to build a stronger economy and deliver a brighter future where hard work is rewarded and young people get the skills they need to succeed in life.
The Westminster government says this builds on their record of ‘transforming apprenticeships’ over the last decade. Since 2010, they have helped 5.7 million people start an apprenticeship, working with employers to develop almost 700 new high-quality standards and increasing the funding for apprenticeships to over £2.7 billion from next year.
Prime Minister Rishi Sunak said: “Growing up in my mum’s pharmacy, I know first-hand how important small businesses are. Not just for the economy, but as a driver for innovation and aspiration, and as the key to building a society where hard work is always recognised and rewarded.
“Whether it’s breaking down barriers and red tape for small businesses, helping businesses hire more young people into apprenticeships and skilled jobs or empowering women to start up their own businesses – this government is sticking to the plan and leaving no stone unturned to make the UK the best place to do business.
“Taken together, these measures will unlock a tidal wave of opportunity and make a real difference to businesses and entrepreneurs across the country.”
Education Secretary, Gillian Keegan said: “This Government has built a world-leading apprenticeship system from the ground-up – with apprenticeships now available in around 70 per cent of all occupations.
“Apprenticeships are a fantastic way for businesses to develop the skills they need, and these new measures will help more businesses and young people benefit from them.
“Our plan to deliver a high-growth, high-skilled economy is working, with more opportunities available to young people than ever before.”
This is the third Business Connect conference to take place since it was launched by the Prime Minister last year and is expected to convene over 150 SMEs, as well as government ministers to discuss how we can further support businesses to grow and thrive in the UK.
The Prime Minister is also expected to announce further deregulatory measures to simplify both non-financial and financial reporting for SMEs which is expected to save thousands of businesses across the UK around £150 million per year.
This includes increasing the number of companies which qualify as a smaller or medium sized business through a 50% uplift to the thresholds that determine a company’s size. This is expected to benefit up to 132,000 businesses who will be spared from burdensome form-filling and non-financial reporting requirements.
The existing onerous and outdated thresholds were previously set by the EU, but our Brexit freedoms mean we can now raise the thresholds to ensure they’re more proportionate and better reflect the needs of British businesses. This has also allowed us to go further than the EU, who recently raised its thresholds by 25%.
The government is also removing several duplicative and bureaucratic EU reporting requirements, including for what companies must set out in their annual reports, whilst also making it easier for companies to share digitalised annual reports rather than paper copies – ensuring businesses practices are fit for the modern age.
Taken together, these changes are expected to deliver around £150 million of savings for SMEs per year and save small businesses at least 1 million hours per year in total.
The Government will also consult on further changes later this year including exempting medium-sized companies from producing strategic reports, which could save them a further £148 million a year and raising the employee size threshold from 250 to 500 employees, which will mean around 1,000 more large companies could become SMEs.
Secretary of State for Business and Trade Kemi Badenoch said: “Almost every job in the UK is owed to what is, or what previously was, an SME. They are the engines of economic growth for this country.
“Whether it’s through cutting red tape, unlocking investment or lowering business costs, today’s announcements show that this government is committed to doing all it can to turbo-charge SMEs so that they can go further and faster than ever before.”
Speaking directly to businesses and delegates at the event, the Prime Minister will underline the government’s plan to create the economic conditions to encourage entrepreneurship and drive growth.
As part of this, the Prime Minister is expected to announce a new industry led Invest in Women Taskforce to unlock private investment in female business leaders and make the UK the best place in the world to be a female founder.
For too long, innovative, women-led start-ups have been held back due to a lack of finance and the proportion of equity capital investment going to all-female founder teams has been stuck at around 2% in the UK for the past decade.
The core aim of the Taskforce is to raise a bespoke funding pot for female-founded businesses through private capital and address the wider challenges that female entrepreneurs specifically face to help unlock their potential to establish and grow their enterprises.
The new taskforce will be industry led and co-chaired by entrepreneur Debbie Wosskow and Barclay’s Hannah Bernard, with Small Business Minister, Kevin Hollinrake, representing the government. The membership of the taskforce will be set out in due course.
Hannah Bernard OBE, Co-Chair of the Invest in Women taskforce and Head of Business Banking, Barclays UK said: “This is an area I am incredibly passionate about, so it is a privilege to be offered this position.
“I believe that the key to the UK’s growth will be enabling every single entrepreneur in this country to thrive; female entrepreneurs face significantly higher barriers to get their businesses the support and investment they need, from seed funding for start-ups, through to the challenges of gaining scale-up investment.
“I’m really excited to be working with Debbie who is an ideal partner given her entrepreneurial credentials and I believe together, we can make a real difference.
Debbie Wosskow OBE, Co-Chair of the Invest in Women taskforce and multi exit entrepreneur said: “Women leading businesses shouldn’t have to face funding challenges to build and grow their business, because of their gender.
“As an experienced entrepreneur, who founded her first business 25 years ago, I know first-hand the importance of breaking down barriers and making meaningful change for female led businesses.
“By putting funding front and centre of this Taskforce, we aim to make the UK the best place in the world to be a female founder.”
In 2024, the year of the SME, the UK government continues to back small businesses as the lifeblood of the economy:
‘The single biggest way we are backing businesses is by the economic conditions for them to thrive, which is why the government has worked hard to deliver on our priorities to halve inflation, grow the economy and cut debt.
‘We have made good progress on our plan. Inflation has fallen from 11.1% to 4.0%, the economy has performed better than forecast, wages are rising, mortgage rates are starting to come down, the economy has outperformed European neighbours and debt is on track to fall as a share of the economy.
‘Because of the progress we have made, the economy is turning a corner and we have been able to afford tax cuts as part of our plan to reward work and grow the economy. But we know there is more to do which is why we’re sticking to the plan to keep building an even stronger economy to support businesses to establish and grow their roots in the UK.’
Martin McTague, National Chair at the Federation of Small Businesses, said: “We welcome these very important announcements on apprenticeships, as well as other action including helping more women start up in business.The Prime Minister is right to take decisive steps to support small employers do what they do best, providing jobs and opportunities in their local communities.
“We have campaigned for more levy-paying businesses to be able to transfer their funds to small businesses in their supply chain, and for crucial support on costs, so we’re pleased to see the Prime Minister make this intervention today.
“Time and resources are in short supply for small businesses and so increasing the amount of funding for training costs will help to improve the number of small firms entering the apprenticeship system.
“Apprenticeships are an effective way of allowing small firms to recruit and up-skill talented people and these measures are a positive way to bolster the number of businesses taking on apprentices.”
Anthony Impey, Chief Executive of Be The Business and Chair of Apprenticeship Ambassador Network, said: “Small businesses are run by some of the country’s most impressive and resilient people, but they are time poor and need a simple, straight-forward skills offer to access the talent they need to grow their businesses.
“These changes will make a real difference in opening up apprenticeships for young people to kick start their careers at a time when small businesses are pushing forward to boost their productivity.”
15,000 loans have now been delivered to support small business owners aged 18-24 since 2012.
Access to finance and advice is available as part of the Help to Grow Scheme to drive government’s ambition to make the UK the best place to start and scale a small business.
15,000 Start Up Loans worth over £100 million have now been issued to young business founders aged 18-24 since 2012.
The Start Up Loan Scheme is government backed finance delivered through British Business Bank, which has delivered over £1 billion in loans to SMEs across the country since the scheme launched in 2012.
The scheme provides invaluable support to young entrepreneurs who are looking to set up a small business – a group which often struggles to get business finance from other sources – and offers an effective pathway into employment, with almost a third of recipients aged 18-24 leaving unemployment thanks to this scheme.
Of all the loans distributed to entrepreneurs under 25, 39% have also gone to female business owners and 24% to business owners from ethnic minority backgrounds. Outside of London, the North West has received the highest volume of loans (1,992), followed by West Midlands (1,591) and the South East (1,291). London has received 3,099 loans in total since 2012.
Among those to receive one of these loans, the most popular industries to launch a business in include retail (£8.5m), hospitality (£5.8m) and arts and entertainment (£2.5m).
Access to finance is a key part of the refreshed Help to Grow Campaign, a one-stop shop for SMEs to find the information they need to start, scale up and grow their own business. The new site brings together the support on offer from the government into one place, making it quicker and more convenient to find the resources business leaders and budding entrepreneurs need to succeed.
Starting a business for the first time, particularly for younger entrepreneurs can be a daunting process. That’s why the government has also – for the first time ever – created a step-by-step guide on how to set up and grow a business in the UK as part of the Help to Grow website.
Small Business Minister Kevin Hollinrake said: “Every large firm started off as a small business and today’s aspiring young entrepreneurs could be the next success story. I urge them to explore how a Start Up Loan could launch their ambitions today.
“Through the British Business Bank, and the Help to Grow campaign, we’ve backed the next generation of business leaders with over £100 million in government backed finance and we’re not stopping there.”
The single biggest way we’re backing businesses is by creating the economic conditions for them to thrive, which is why the government is working hard to deliver on our priorities to halve inflation, grow the economy and cut debt. We’ve made significant progress and it’s clear the economy is turning a corner.
The government is also tackling a key issue affecting small firms – late payments. We are determined to make the UK the best place in the world to do business, which is why Minister Hollinrake launched the Prompt Payment and Cash Flow Review in 2023. Since the report was unveiled, we are looking at how to prosecute large firms who persistently and knowingly fail to adhere to the Payment Practice Reporting Regulations.
We’re also backing businesses through our £4.3 billion package to support SMEs with business rates, the Small Business Rates relief taking a third of properties out of paying rates completely, and extending the Retail, Hospitality and Leisure relief for a fifth year, we are helping businesses navigate challenging economic times.
Business owner Cory Hibbin, aged 20, is one of the recipients of a Start Up Loan. He took out a £14,500 loan in March 2023 to launch Techie Services. The company, based in Hastings, offers security solutions for residential clients, estates and corporate buildings, including CCTV, alarm systems and network management.
Cory doesn’t live with family or have any financial support from them so his aspiration of setting up Techie Services would not have been possible without the help of the bank’s funding.
He left school at 16 and started an apprenticeship as an IT engineer at a consultancy firm. After developing his skills, he started offering surveillance services on the side of this day job. The client was so impressed that they asked him to work for them full-time.
Cory, founder of Techie Services, said: “I’m not the sort of person who can take on learning from behind a desk so I left school at 16 to do an apprenticeship with a local IT consultancy company.
“While working there, I was working on the side in the evenings and at the weekends. Having been there for four years, I felt like I had gained enough experience to start my own company, which is when Techie Services began.
“I started with one large client, who quickly recommended me to other businesses and individuals, so I took on five new clients in our first six weeks.
I”t hasn’t been easy but it’s the best decision I’ve ever made. The money from Start Up Loans was invaluable in the success of the business – I used it to buy tools for installations as well as supplies for the office.
“While it might seem a big leap of faith to some people, you can’t let the fear of failure stop you from trying in the first place. I urge anyone 18 or above to look into the finance options available to them if they need a hand getting off the ground.”
Richard Bearman, Managing Director, Small Business Lending, British Business Bank said: “It’s amazing to see people in their late teens and early twenties with such ‘can-do’ attitudes and motivation to achieve success in working life.
“Our £100 million funding milestone is a significant landmark and testament to the hard work of Start Up Loans, ensuring anyone with a good business idea like Cory’s, no matter their age, has the access to the funding needed to bring it to life.
“The impact of this on communities across the UK has been huge and we’re determined to keep backing aspirational young people with money and mentoring.”
Small and medium businesses dominate Hospitality industry, making up 68% of all businesses
Northern Ireland has the highest percentage of SMEs out of any region, at 29%
SMEs make up more than 25% of all businesses in the United Kingdom
New research has revealed how important small and medium enterprises are for the British economy, as businesses that employ between one and 249 employees contribute more than £2 trillion in turnover and employ 44% of the British workforce.
The study by marketing training hub School of Marketing analysed the latest ONS and government data on the number of small and medium enterprises in 2021 to see which regions and industries are powered the most by SMEs.
Analysis of the industries revealed that the Hospitality Industry has the highest proportion of SMEs out of any industry. Out of the 200,645 businesses operating in the industry, 140,050 are small or medium-sized, which equals roughly 69.8%. The Hospitality Industry is made up of accommodation and food services including hotels and restaurants.
The industry with the second-highest percentage of SMEs is Wholesale and Retail Trade. This industry, which also includes mechanic shops that repair motor vehicles and motorcycles, has more than 500,000 businesses, and more than four in ten (43%) are small or medium-sized.
Real Estate Industry has the third-highest proportion of SMEs, with 35.4% of all enterprises having below 250 employees. The industry has 134,095 businesses operating in the UK, and 47,740 are small or medium-sized.
In fourth is the Agriculture, Forestry and Fishing Industry, which has more than 150,000 businesses running in the country, and roughly 50,000 (33%) are SMEs.
The industry counting the fifth-highest percentage of SMEs is Manufacturing, with 32% of the enterprises operating in this industry being small or medium-sized, which is 87,210 out of the 270,000 businesses.
The study also analysed each UK region and found that Northern Ireland has the highest proportion of SMEs in the UK. 123,705 businesses are operating in Northern Ireland, and 36,369 are small or medium enterprises, making up roughly 29.4% of all companies.
Scotland has the second-highest percentage of SMEs out of all the UK regions, with 27.7% of all businesses being SMEs. There are 342,045 companies in Scotland, and 94,746 have fewer than 250 employees.
The East Midlands is home to the third-highest proportion of SMEs, with 100,300 SMEs, making up 27.3% of the 367,400 businesses operating in the region.
North West England has the fourth-highest percentage of SMEs in the UK, with 26.7% of businesses operating in the area being small or medium-sized.
Wales is tied for fourth, as 26.7% of operating businesses in the country are SMEs. 55,373 out of the 207,390 enterprises in Wales have fewer than 250 employees.
The study also assessed the most in-demand skills for entry-level positions across a range of industries and found that Communication and Microsoft Office proficiency are the most commonly occurring skills on job adverts – both appear in 61% of the jobs that were analysed.
The third most in-demand skill is a High Attention to Detail, appearing in 44% of ads for entry-level positions. Finishing off the top five is a tie for fourth between Time-Management and Self-Motivated, both showing up on 39% of job adverts.
Commenting on the findings, Ritchie Mehta, CEO of School of Marketing said: “There are more than 1.4 million British companies which employ between one and 249 people, and combined they turn over a massive £2 trillion every year, which is 45% of total turnover from UK businesses.
“It’s essential that they are not only given the support to grow and continue making such an important contribution, but also that there is a skilled workforce able to help them deliver and adapt to the demands of an evolving economy.
“This data shows that when it comes to skills, there are some common themes that employers are looking for across a range of jobs, however in the current climate, budgets for training are likely to be cut, and the skills gap could widen.
“SME owners can take advantage of the Apprenticeship Levy scheme to bring in new staff or train current ones in digital and data-led programmes, with the vast majority of the training cost covered by the levy.”
The study was conducted by the School of Marketing, which offers leading digital and data marketing apprenticeships.
“Good businesses will fail, unless the government acts”
THE NATIONAL Chair for the Federation of Small Businesses Martin McTague has issued a stark prognosis for small businesses in the months ahead.
He warned that rising energy prices and current business rates and tax will see many businesses go under; which could have a major impact on the UK economy as 60% of the private sector workforce work for small businesses.
Speaking to GB News, Mr McTague said: “There’s a completely toxic mix, and that mix is very low cash reserves; I think the ONS figures said that that 40% of businesses are operating on less than three months worth of cash.
“You’ve got very high taxation levels, the highest for 50 years. A massive slump in demand, and then if you build into that mix the fact that energy prices for some businesses are four or five times what they were previously.
“Most businesses renew their contracts in October, and the quotes that I’ve seen from a lot of our members were alarming. In some cases their prices had gone from £23,000 a year up to £112,000 per year. One farmer I spoke to was seriously considering putting a generator on to power his operation because he couldn’t see how he could operate any other way.
“Now what we need, starting Monday I think, is a government that recognises that this is an urgent problem. And that a lot of good businesses will fail, unless they act. I think sometimes people treat it as if it’s something that you can separate out from consumer issues, whereas 60% of the private sector workforce work for SMEs. So that will be a major problem for lots of people.”
“There are three key things I think we need to do starting Monday. The first will be to reverse the National Insurance increase, that was something that almost universally all small businesses disliked.
“Then there is a serious problem with business rates, I think it’s time that the government doubled the small business rates relief, currently standing at less than £12,500 and could go up to £25,000. I think that would encourage a lot of small businesses, particularly in the North of England.
“Then cut VAT to try and encourage demand. At a time when a lot of consumers are lacking confidence, you need to give them that bit of a push to get back in the shops.”
Cyber crime is on the increase. Since the onset of the COVID-19 pandemic, cyber attacks on businesses have surged, and a UK Government survey found that a shocking 39% of businesses came under attack in the first quarter of 2021.
Even more worryingly, attackers are starting to move away from large corporations to focus on small businesses, which are seen as softer targets, but in many cases find it more difficult to recover from an attack.
With cyber attacks on the rise, many executives ramped up their cybersecurity spending in 2021. However, research by cyber security specialists FoxTech has found that numerous industries are still at a significant risk of cyber attack.
CTO of FoxTech Anthony Green explains why:“Unfortunately, money spent on cybersecurity is not always spent in the right places, due to a lack of knowledge around the issue. This has left many companies who have invested in security measures, still vulnerable to attack.”
To help combat the problem, FoxTech has put together a guide to the top three cybersecurity problems they see in the companies they work with:
Buying products and forgetting the people to run them
Many business owners believe that the best ways to protect themselves against cyber attack is to buy and install the latest security products. However, far from offering infallible protection from cybercrime and malware, products such as endpoint detection, firewalls, and anti-virus software should be thought of as tools which can be utilised by your security team, rather than an end in themselves.
Anthony explains: “You can have the best cybersecurity and compliance products money can buy, but without the staff and expertise to run them you’re wasting your money.”
With Cyber Security specialists in high demand, it is not practical for the typical SME to have this expertise in-house – which is often why they are drawn to expensive cybersecurity products, when they could significantly improve their security using the basic products they already have, if only they had the skills and knowledge to configure them appropriately.
The UK DCMS 2021 report found that while 83% of UK Companies have up to date anti-malware software, only 29% have all the NCSC’s recommended “Cyber Essentials” in place to protect themselves from the attacks every organisation faces. Most commonly missing are simple things like installing software updates and securely configuring laptops.
Many UK small and medium sized businesses could make significant improvements to the security of their system by engaging a cybersecurity firm as a trusted advisor, rather than relying solely on expensive software. Getting an expert on side can help companies discover where their current security controls are lacking, and develop the tools and business processes to put them right.
Lack of education around email protection
Email is the number one initial attack point for malicious cyber activity. Every company uses email, and many do not have sufficient email security set up, meaning attackers can easily gain access and send phishing emails, with the intent to steal your company’s information and carry out further attacks via ransomware, trojan horse installation or credential theft.
Alarmingly, only a single employee has to fall for a phishing email for an attacker to gain access to your company’s email.
It is therefore essential for every business to take simple steps to reduce the risk of phishing and business email compromise:
Security Awareness Training for staff Two Factor Authentication on email accounts Secure configuration of your email service
Only 14% of UK companies perform security awareness training even though the NCSC provides free security awareness training available here: https://www.ncsc.gov.uk/training/top-tips-for-staff-scorm-v2/scormcontent/index.html
What if a malicious email still gets through? Anthony provides some reassurance: “If one of your employees falls for a phishing attempt, there is still time to avoid significant financial damage.
Email accounts are often compromised weeks or months before the damage is done – with compromised accounts being traded on the black markets to the highest bidder who can monetise your account through ransomware, or impersonate your CEO to redirect a large payment.
Careful monitoring by cyber security experts can stop the kill chain before the final payload is delivered – turning what could be a major disaster into just a minor incident.”
Not knowing your company’s vulnerabilities
Of all the threats to the cybersecurity of businesses, the biggest is a lack of knowledge about vulnerabilities in their systems. “It’s not that businesses don’t take their cybersecurity seriously” says Anthony, “but that they don’t realise their current strategy is inadequate, until it is too late.”
One of the only ways to learn exactly where the weaknesses are in your system (places where hackers could gain a foothold) is to get a cyber security assessment done by an independent cybersecurity specialist, who can scan for the same weaknesses that hackers are looking for.
Identifying where you are vulnerable, before implementing a strategy to secure your IT systems, process and procedures from attack is the most reliable way to protect your business as we go into 2022.
As we enter into a new year, cyber crime continues to threaten businesses. Cyber attacks cost the global economy an estimated $6 trillion USD in 2021, and the costs are predicted to increase for 2022.
Since the beginning of the pandemic, hackers have been quick to exploit the growth in home working practices. Small businesses also reported an increase in attacks, and with 60% closing within six months of falling victim to a data breach, establishing a comprehensive cybersecurity strategy has never been more important.
Anthony Green, CTO and cyber crime expert at FoxTech, discusses what businesses should watch out for in the coming year: “In 2022, with many organisations implementing flexible working policies, and bringing personal devices into the office, it’s important to understand how cyber attackers might continue to exploit our changing working practices.
“It is often easier for attackers to breach home network devices, so when personal devices are being used to access company data at home, or brought into the office and connected to company networks, it can expose their system to hackers searching for vulnerabilities to exploit. With hybrid working policies expanding companies’ cyber risk, it’s vital to be aware of what the threats are, and how to prevent attackers gaining access.”
To help businesses plan their cybersecurity strategies, FoxTech has put together a guide to the top predicted cybersecurity threats for 2022, and what organisations can do to protect themselves:
Ransomware
Ransomware was the defining force of cyber attacks in 2021. Hackers infiltrate a system, steal sensitive data and demand a ransom for its return. Ransomware attacks surged by 144% in 2021 from the previous year, and the problem is only expected to develop in 2022.
Anthony comments: “A spate of high-profile ransomware attacks in 2021 has led many organisations to review their cyber risk controls and implement more effective strategies against data loss.
“While this might make it more difficult for cyber criminals to mount traditional ransomware attacks in the short term, attackers are incredibly agile, so we are expecting their strategies to shift in the coming year”
“To prevent your business from falling foul to a ransomware attack, there are two things to consider:
Preventing an attacker from gaining network access – investing in an external security assessment is the most reliable way to discover your vulnerabilities. Cybersecurity experts can then configure your security tools to protect you from the latest methods of attack.
Catching an attacker before it’s too late – it can take months for an attacker to gather the data they need to demand a ransom. Working with an external, specialised cybersecurity company that can monitor your system and quickly alert you to any suspicious activity can be the difference between a minor incident and devastating financial loss.
“Constant systems monitoring – by someone who is aware of developments in attackers’ tactics – will be more important than ever, as cyber criminals are looking for new ways to circumvent security operations. Currently, businesses are subject to 10,000 attempted attacks a day, but it often takes months for hackers to infiltrate an organisation’s most well-protected data. Catching a threat straight away, and acting quickly to mitigate the effects of a breach, will prevent attackers from stealing enough sensitive data to deliver a ransom.”
Phishing
Over 75% of cyber attacks start with someone opening a malicious email. These emails are designed to extract data from the recipient, usually a password, which is used to gain further access to an organisation’s network. Once an account takeover has been successful, hackers are able to mount more sophisticated attacks.
So how can businesses protect themselves from phishing scams?
Anthony comments: “Security awareness training is essential. Only 14% of UK companies perform cybersecurity awareness training, but educating employees on how to spot phishing scams is crucial.
“Things such as shortened links, an impersonal address, or anyone asking for private information, can all indicate that an email is not legitimate, even if it appears to come from a trusted source.”
The NCSC provides free security awareness training available here:
It is also imperative to set up Two Factor Authentication on email accounts and ensure the secure configuration of your email service.
Business Email Compromise Attack
In 2022, when so much business will be conducted through online conversations between remote workers, organisations need to be aware of business email compromise attack – also known as ‘conversation hijacking.’ These attacks are well-researched, and highly personalised, making them difficult to detect and very effective.
This kind of attack usually comes once access has been gained through a phishing attempt. A hacker reads through breached emails to learn as much as they can about business practice and payment details.
Next, they will use this information to craft seemingly authentic messages which can be sent to both employees and customers, with the aim of tricking them to transfer money or update their payment information.
“A scam that we are seeing more and more frequently is when a hacker impersonates an organisation’s CEO to redirect large payments to their own accounts,” says Anthony.
“Once this money has been lost, it is almost impossible to retrieve, so it really is crucial to prevent hackers gaining access in the first place – and to have your accounts frequently and carefully monitored by cybersecurity experts who can spot an intruder before the final attack has been mounted.”
The Chancellor is expected to announce a new, £150 million fund to help thousands of small and medium sized enterprises in Scotland in tomorrow’s budget – building on the Government’s commitment to level up opportunities across the UK.
The fund will be delivered through the British Business Bank, working closely with local partners, and will help Scottish SMEs to invest and grow. It will build on the success of existing funds in other parts of the UK, which have been shown to support the creation of high-paying high productivity jobs and the upskilling of existing workforces.
Similar existing funds in England and Northern Ireland typically provide loans or invest in local companies – this can be recent start-ups looking to borrow smaller amounts to kickstart activity or established SMEs looking for larger investments to grow their business. Details on how businesses in Scotland can access the fund will be outlined in due course.
Chancellor Rishi Sunak said: “This fund will help thousands of small businesses in Scotland to make ideas a reality and grow their companies . I’m always impressed by the innovation and determination of SMEs and the UK government will continue to support businesses across the UK.”
Since the start of the pandemic the UK Government has spent £352 billion right across the UK on support measures. In Scotland this included protecting more than 900,000 jobs through the furlough scheme, £294 million in self-employment support, help for businesses and the procurement of vaccines.
In addition to the £150 million for Scotland, Wales will benefit from £130 million for a new fund and the British Business Bank will receive an additional £70 million to build on existing programmes in Northern Ireland.
