Business Review – April 2025

Business groups react to Trump’s tariffs 

President Trump’s recent announcement confirming the imposition of global tariffs has been described as ‘deeply troubling’ and ‘a blow to British businesses’ by leading figures across the UK business community. 

On 2 April, the President unveiled a suite of tariffs on imports from around the world, including a baseline 10% levy on imports of all UK goods. The Federation of Small Businesses (FSB) said the tariffs would cause ‘untold damage’ to small firms trying to trade their way to profit while the domestic economy remains flat and that the fallout would ‘stifle growth, hurt opportunities and put a serious dent in the global economy.’ 

The Institute of Directors (IoD) described Trump’s tariffs as ‘a blow to British businesses’ and said they eliminated any hopes of the UK avoiding ‘the crosshairs of the global trade war.’ The IoD did, however, express its support for the UK government’s ‘pragmatic and level-headed approach’ and its efforts to pursue ‘constructive engagement’ with the US administration.   

This strategy was also praised by the Confederation of British Industry (CBI), who noted that ‘a cool and calm reaction’ from the UK government was the right response. The tariff announcement was though described as ‘deeply troubling for businesses’ with the CBI adding ‘there are no winners in a trade war.’ 

Survey shows firms still relatively upbeat 

Data from last month’s Lloyds Bank Business Barometer showed sentiment among UK firms held steady, with the overall confidence index remaining at February’s six-month high.  

The bank’s latest survey was conducted between 3–17 March with the headline confidence metric unchanged at +49%, as weaker sentiment in manufacturing and a slight fall in services was offset by rising optimism among the retail and construction sectors. Firms’ views of their own trading prospects held steady at post pandemic highs, while optimism in the wider economy dipped slightly but remained above the depressed levels seen in late 2024. 

Commenting on the findings, the commercial bank’s Senior Economist Hann-Ju Ho said, “Business confidence remained steady in March, suggesting UK companies may have been waiting to see the impact of government decisions at home and globally. With confidence maintaining February’s high, business leaders are optimistic, noting that investing in their development and workforce will position them well to seize future growth opportunities.” 

Another recently published survey also reported a pick-up in business optimism during March, with the IoD Economic Confidence Index rising six percentage points to -58. The IoD, however, did note that, despite this improvement, the index does remain around pandemic lows. 

Scaling up SME digital technology adoption 

The SME Digital Adoption Taskforce recently published an interim report detailing recommendations to government on how to help small firms embrace new technologies and thereby boost productivity and help drive economic growth. 

The Department for Business and Trade established the industry-led taskforce in April 2024 in order to explore how smaller businesses can be supported to adopt basic, productivity-enhancing digital technology, such as cloud computing, customer relationship management and resource planning software. The interim report sets out the taskforce’s vision for accelerating SME digital adoption, along with a plan for how change can be delivered based on international best practice in this area.  

Recommendations covered by the report include: the creation of a single point of accountability within government to drive digital adoption; creating artificial intelligence powered support tools that will be made available to all SMEs; providing better access to data for monitoring and evaluation; developing a comprehensive understanding of how to drive demand using behavioural science and targeted communication; and establishing standards for e-invoicing. 

Each of the recommendations will now be developed through engagement with interested stakeholders and small businesses. A final report is then due to be published this summer. 

Employment Rights Bill concerns remain 

The British Chambers of Commerce (BCC) has raised significant concerns over the Employment Rights Bill which it believes ‘still does not strike the right balance.’ 

The government’s landmark Bill, which will introduce a range of employment law reforms, including day one unfair dismissal rights, improved access to Statutory Sick Pay and enhanced protections for zero-hours workers, continued on its legislative journey with a second reading in the House of Lords on 27 March. 

While the BCC acknowledges the government has listened to business concerns, it still describes some of the proposals as ‘deeply worrying’ for employers and believes there is a high risk of ‘unintended consequences’ that could limit employment opportunities and economic growth. Specifically, the BCC has highlighted planned changes to dismissal rules, trade union ballot thresholds and zero-hours contracts, as some of the critical areas that need to be revisited in the next stage of the parliamentary process.   

Jane Gratton, Deputy Director Public Policy at the BCC, concluded, “The government must continue its positive approach to engagement with business and remain open to changes. Only then can it ensure this legislation is proportionate, affordable and right for both firms and their employees.”   

Flexibility in the workplace 

Research conducted by Phoenix Insights has found that the early thirties marks a key turning point at which employees typically start to prefer the opportunity to work fewer hours even if such a decision results in reduced pay. 

The study found that people view the number of hours they work as the most valued form of flexible working arrangement. The findings also vividly highlight how flexibility in this area becomes increasingly important for workers as they move through the different stages of life. 

Younger employees starting out on their careers, for instance, were much more likely to want to take on more hours or move jobs in order to boost their income rather than work fewer hours. In contrast, a similar proportion of 30 to 34-year-olds expressed a desire to either increase or reduce their hours; by the time people reach their fifties, however, twice as many prefer to work fewer rather than more hours despite the negative impact on pay.  

This shift in priorities will partly reflect life-stage transitions, particularly a desire to reduce hours as people move towards retirement. In addition, the study’s authors believe it reflects an increasing need for employees to accommodate care or home-related responsibilities, as well as a growing desire to improve work-life balance.   

Other News 

Workplace recycling rules 

New legal recycling duties came into force in England on 31 March, with businesses now required to separate their waste into three categories before it is collected; this includes any waste produced by employees, customers or visitors. Micro-firms (businesses with fewer than ten employees) have been exempted from this requirement until 31 March 2027. Details on how to comply with the new regulations can be found on the gov.uk website. 

Call for evidence on remote working 

The House of Lords Select Committee on Home-Based Working has invited small firms to share their views about the real-world impact of flexible working on their businesses. The call for evidence will feed into the committee’s inquiry into the effects and future development of remote and hybrid working in the UK. The deadline for submissions is 10am on 25 April.  

Pooch power 

A survey undertaken by Sainsbury’s Bank suggests dog ownership is prompting many employees to re-evaluate their work-life balance and adjust work schedules in order to look after their canine companions. According to the study, around one in six UK dog owners have modified their working hours to accommodate caring for their pets, while one in eight work from home more frequently to avoid their dogs being left alone for extended periods of time. 

Quirky Quote 

“Don’t sweat the petty things and don’t pet the sweaty things” – George Carlin 

Business response to Spring Statement  

On 26 March, Chancellor Rachel Reeves delivered her Spring Statement in the House of Commons. During the speech, she announced welfare cuts and departmental spending reductions in order to balance the government’s books in the face of the worsening fiscal outlook predicted in the Office for Budget Responsibility’s revised economic forecast. The Chancellor also confirmed there will be a full Spending Review in June but, in line with her commitment to just one major fiscal event a year, no further tax rises were announced. 

While business groups did offer their support for some of the measures, they also expressed disappointment that the Statement failed to provide greater help for the business sector.  

“The Chancellor has rightly kept her word not to further increase business taxes and we urge her to go further in her next full Budget and actually lower the tax burden, including delivering on the promises made by Labour in opposition to transform the out-dated business rates system and make it fit for purpose in a modern economy. Freeing up funds for small firms to invest in their business rather than having money swallowed up in high taxes is the best way to achieve growth.”  

Tina McKenzie, Policy Chair of the FSB 

“The government must focus on reducing the cost pressures for businesses, boosting investment and exports. Firms are realistic, but they are also hurting…  faced with higher National Insurance contributions (NICs) and a rise in the National Living Wage. Our research shows 82% of businesses will be impacted by the NICs hike – with firms forced to raise prices, postpone investment and cut back on recruitment. That’s why we need a wider tax roadmap for business. For the economy to grow, businesses need to thrive. Ahead of the Comprehensive Spending Review we’ll be working closely with ministers to ensure that they create the right environment for firms.”  

Shevaun Haviland, Director General of the BCC 

“The Chancellor has kept her promise to business not to raise the [tax] burden further and focus on the efficient delivery of public services. It is the right approach that the government asks of the public sector the same as it has been expecting of business since the Budget – to absorb costs through agility, modernisation and innovation. Protecting public capital spending is the right move to create the foundations for future growth but the government cannot deliver growth alone. Only the private sector can provide investment at the pace and scale we need to boost productivity, create jobs and improve living standards. The government must use the Spending Review to double down on unlocking investment to secure the more positive outlook for long-term growth. Setting a world-leading goal for R&D investment, giving employers the flexibility to choose the training and qualifications that make sense for their workforce, and improved public private partnerships to fund better homes, better schools and better transport would all help deliver growth.”  

Rain Newton-Smith, Chief Executive of the CBI 

All details are correct at the time of writing (7 April 2025) 

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