2025: There may be trouble ahead, but reason to be cheerful too

As we begin a New Year one of our long-standing contributors, Ian Mean, takes a look at the challenges ahead for businesses and the county - and finds a significant silver lining too.

Putting it mildly, many businesses face real challenges as we enter 2025 and as a result, the government’s much vaunted growth seems somewhat lost, writes Ian Mean.

The key challenge is perhaps the outcome of the October Budget.

Put simply, it will leave many of our SMEs-the small and medium size businesses-struggling to survive following the National Insurance increase of 15 per cent from April.

One Gloucestershire boss I talked to last week told me the National Insurance rise would cost his business £30 000 - and that was for a relatively small business.

It is those SMEs-the engine driving the Gloucestershire economy -which will be hit hardest.

We have just under 30 000 of those SMEs here and when you look at the county council list of these firms you see that a lot of them are micro businesses-that is those with just 0-10 employees.

Here’s a sample of that SME list of companies here.Stroud: 5,785 of which 5,150 are micro firms;Cotswold: 6,075 of which 5,415 are micros; Cheltenham: 5,190 of which 4,570 are micros and Gloucester: 3,705 of which 3,155 are micros.

So, let’s be clear, any real growth in our Gloucestershire economy has to come from these SMEs-often very innovate firms or start-ups, particularly in the growing digital and cyber sector.

Does it then make economic sense to pile on a hefty National Insurance rise based on their number of employees when a business is trying to grow?

Surely it doesn’t.

And without wishing to sound too gloomy at the start of a new year, the economic experts are warning of a possible recession. The Bank of England is saying that the Budget has left us with zero growth.

Manufacturing output has slipped at the fastest rate for years and inflation is the highest for eight months.

We do seem to be stuck in a rut economically.

I am not an economist and have no financial crystal ball, but it seems to me that we need to put getting people back to work as a government priority to increase productivity and the tax take.

The number of our economically inactive people is growing , and I think it is worrying to now see an increase in Gloucestershire in the number of NEATs among our young people-those not in education or training.

We need to actively start getting people back to work following Covid or early retirements. I am glad to see that Gloucestershire County Council is now developing a plan to do that but it must be a national, government backed effort.

In my view, employment growth plans need to have local businesses at the heart of local schools to offer careers advice and create possible routes to encouraging apprenticeships.

This is not rocket science and not a new idea. I have been working with schools and been staggered by the lack of careers advice available-one excellent teacher I worked with has just four hours a fortnight to give careers advice and that Is far more than most!

I am always excited by business and its innovation. So, I am enthusiastic about the development in Gloucestershire of two sites for the development of the new small medium nuclear reactors-or SMRs.

They are at Berkeley and nearby Oldbury-both sites of decommissioned nuclear power stations. Gloucestershire has nuclear in its DNA—with great expertise and skills from the 60s.

The plans for these new SMRs-the size of about 2-3 football pitches-are ,of course, under wraps but we are due to get the result of a competitive tender for the technology to buid and design them in the Spring.

This is a huge project.

We are talking about something in the region of 5 000 construction jobs in the early stages of this landmark nuclear project with government and private investment running into hundreds of millions of pounds.

Such a large energy development programme will create hundreds of highly paid jobs and give Gloucestershire a massive economic boost.

We should look forward to it.

*Ian Mean MBE is a member of Gloucestershire County Council’s new Economic Growth Board and former vice-chair of GFirstLEP. He is a former editor of the Western Daily