GUEST COLUMN:
Ben Cottam
Head of Wales
Federation of Small Businesses
This year’s UK Government Budget made it clear that the coming months will be challenging for businesses. A particular worry for smaller firms is the convergence of cost increases scheduled for April, effectively creating a cliff edge for many already-stretched businesses.
With employment costs, the national living wage rise, and complex new employment rules all converging at once, it’s crucial that we look for balanced support measures to help our business community navigate this turning point.
For Welsh businesses, the spotlight now turns to the Welsh Government’s upcoming Draft Budget. We’re calling on Cardiff Bay to address two key priorities: transport and productivity. Improving local transport infrastructure – especially outside major urban centres – is an investment that would significantly help businesses, employees, and the wider economy.
Consider Wrexham Industrial Estate, a key employment hub, yet poorly served by public transport. Businesses there report that inadequate bus and road infrastructure limits their growth, making it difficult for staff to get to work reliably.
Transport issues like these directly affect productivity, a concern shared by smaller firms that trade within a local radius. Ensuring that businesses can access strong road and public transport links will not only make it easier for employees to commute but will also encourage companies to invest and expand with confidence. And while discussions around infrastructure development often centre on South Wales, it’s critical to remember that connectivity challenges span the whole of Wales.
Another aspect of productivity is how readily we can move through planning and regulatory systems. While the Chancellor acknowledged the role of supply-side reforms, there is still more that needs to be done to unlock growth at the local level. The Welsh Government has indicated it would look to streamline its planning process – but for now, businesses await the concrete details. Meaningful reforms in this area could be transformative, freeing up resources for businesses and accelerating infrastructure projects that drive long-term economic gains.
One question worth asking is whether having a Labour administration in Westminster and in Cardiff Bay will actually bring benefits in terms of investment for Wales. Improved communication and collaboration between the two governments would be a welcome change, but businesses are looking for practical outcomes, not just political goodwill. It’s time for a joined-up approach to stimulate real economic growth in Wales, one that puts tangible support measures in place rather than relying on political alignment alone.
April’s increase in business costs highlights the importance of both short-term and longer-term supports. It’s positive that the Chancellor increased the Employment Allowance, which will benefit many small businesses. However, this doesn’t alleviate the collective impact of all the upcoming cost hikes, especially for sectors such as hospitality and retail, which are still recovering from the pandemic and now face new financial pressures.
For businesses already facing tight margins, any relief offered by government policies can make a significant difference. Freezing the business rates multiplier and extending relief for the retail, hospitality, and leisure sectors in England were welcome moves in the Budget, but these are policies we hope to see echoed in Wales. The cliff edge in April will require Welsh Government measures to steady the path and support businesses to remain competitive.
A well-functioning transport network, paired with a focus on efficient planning and regulatory systems, is key to creating an environment where businesses can thrive. Productivity gains and economic resilience are not only within reach but are crucial for the long-term prosperity of Welsh businesses.
