Call for ‘predictable economic environment’ to help firms invest
Businesses need stability in 2026 – that’s the message from North West leaders as they head into the New Year. After a year of uncertainty and U-turns in Government policy, bosses say they want clarity and certainty so they can invest in growth and upskill their staff despite ongoing pressures of high costs.
Adrian Young, tax partner at accounting and business advisory firm HURST, said: “The business leaders with whom I speak are broadly united in their desire for the new year to bring stability. This matters more than ever after recent global shocks, domestic policy shifts and, in particular, uncertainty with regard to tax. I think businesses above all crave a predictable economic environment that allows them to invest and innovate with confidence.”
Mr Young said firms wanted stability in tax policy. He said: “In my experience, businesses are not generally calling for lower taxes, rather they are asking for clarity and predictability. The debacle that surrounded the recent budget, where tax-raising policies were mooted only to be dropped and replaced with others, only caused anxiety for businesses.
“This was particularly the case for employers who, having been hit hard by the changes to national insurance contributions and national minimum and living wage levels earlier in 2025, feared another hit in November.
“Frequent and unexpected changes to the tax rules make long-term planning difficult, and to me that appears particularly so for larger employers.”
Mr Young said firms also wanted stability and certainty around their tax burdens, adding: “Predictability in employment costs will help firms manage workforce planning while supporting fairer outcomes for employees”.
And he added: “Another priority is certainty around incentives for investment and skills. Businesses want reassurance that reliefs such as research and development tax credits will remain available for genuine ground-breaking work.”
Steven Mason, an insolvency practitioner and senior manager at Radcliffe-based insolvency and corporate recovery practice Inquesta, agreed that businesses need stability.
He said: “So, what do small businesses need from policymakers in 2026? The priorities are clear: cost relief and better conditions from government (through a reduction in bureaucracy and burdensome regulations) in which to thrive.
“SMEs need a stable framework that allows them to plan, invest and grow with confidence. Access to finance is key. Despite relative stability in borrowing costs, uncertainty and an unwillingness to lend still hamper investment. Simplified lending processes and alternative financing options may well enable businesses to innovate and expand. Late payments remain a chronic challenge for smaller firms. Ensuring timely payments from larger clients can make the difference between survival and insolvency.
“Without relief from some or all of the above pressure points, ongoing burdens risk driving higher insolvency rates and job losses, which are already at a four-year high. The resilience of many UK SMEs should not be underestimated – but survival itself is no guarantee.”
Firms to focus on training and skills
Paul Cherpeau, chief executive of Liverpool Chamber, said: “Training and skills will continue to be a subject of major focus for business owners throughout 2026. With labour costs rising and the advent of new employment rights legislation, finding the right people remains both difficult and expensive, especially if it doesn’t work out. Acute skills shortages in sectors such as construction and engineering further exacerbate the challenge.
“Liverpool Chamber oversees the Local Skills Improvement Plan (LSIP) and a growing thread of feedback from employers is the need for candidates entering the labour market with greater ‘soft’ employability skills, as well as digital literacy to maximise the future opportunities of AI and other technologies, and evidence of more real-world learning experience.
“We will be working increasingly with local employers over the next 12 months to understand their labour needs and translate those into meaningful recommendations for further education providers and policymakers.”
Businesses still fear rising costs
David Lowe, investment director at Quilter Cheviot, said: “As the goalposts shift constantly for individuals and businesses, the demand for professional advice continues to increase across a range of needs, such as wills needing to be redrawn, or how to use allowances more effectively.
“The decision in the Budget to raise taxes on dividends made SME owners wince and they will be feeling even more squeezed over the coming year.
“Wage inflation is another real danger for businesses, as staff in sectors such as hospitality respond to the increase in the National Minimum Wage by demanding their own increases at higher pay levels. Businesses have little choice but to pay it, yet some are already close to the tipping point.”
Victoria Johnson, HR commercial director franchise, at Privilege HR said: “As labour costs continue to rise, businesses will review workforce needs using planning models to consider profit and loss trajectory and the wider economic picture. This may result in less senior recruitment and more firms electing to upskill existing managers, with an eye on succession planning.
“Businesses are also becoming more creative in their approach to pay and benefits to foster a culture that makes good people want to stay and develop. Rather than a ‘one size fits all’ strategy, more firms now recognise that gym memberships may be less valuable to some employees than working compressed hours, or having more annual leave to spend with their family, so a more bespoke plan is needed.”
Gavin Sherratt, founder at GoodShip* agency and fractional lead for creative, digital, start-up & scale-up at Liverpool Chamber, said: “In 2026, Liverpool Chamber will take a clear step into the future by supporting members and the wider city to understand and use AI in a practical way. Through the launch of the Chamber AI Academy, we will help organisations of all sizes build confidence with AI. Training will be shaped around real roles and sectors, so people can see how AI fits into their day-to-day work and decision-making.
“Alongside this, we will launch Navigate, a new community partnership designed to support Liverpool’s creative, tech and entrepreneurial communities. Navigate will bring together what already exists in the city, while also connecting creatives and technologists with trusted professional services that help businesses grow on strong foundations.”
Green energy needs public-private collaboration
Amy House, director of Green Economy in Manchester, said: “In 2026, the big hope is that the progress we’ve seen starts to translate into delivery on the ground – with more investment flowing into clean energy, clearer incentives for businesses, and practical help to support the shift to net zero, all driven by stricter sustainability regulation.
“There’s a genuine opportunity to build biodiversity and circular economy thinking into the way we design, build and run places, rather than bolting it on at the end.
“The challenge is making sure ambition doesn’t run ahead of reality. Skills shortages, cost pressures and ongoing uncertainty could all slow progress if they’re not tackled head-on. Looking ahead to 2026, continued closer collaboration between the public and private sectors will help to turn climate goals into real economic and environmental gains.”
Government must tackle tribunal backlog
Charles Millett, employment law partner at Morecrofts Solicitors, said: “The passing of the Employment Rights Bill into law brings with it multiple challenges for businesses. Despite widespread media coverage, many smaller businesses may still be unfamiliar with the finer detail of the legislation and it could easily become a trap for the unaware.
“Backlogs in the employment tribunal system will continue to cause major headaches for employers and employees alike. Claims submitted today may take on average three months to be processed and could wait until 2027 to be heard, which is a major disincentive for all involved. No support was mentioned in the Budget but the government must take steps to address the backlog in 2026, particularly given the likely increase in the number of claims once the measures under the Employment Rights Act take effect over the next 18 months.”
In 2025, investor Foresight Group announced a £90m first close of its third North West fund.
Claire Alvarez, North West-based partner at Foresight said: “At Foresight, we see regionally based SMEs as the unsung heroes of the UK economy, yet they remain structurally under-served when it comes to growth capital. These businesses play a vital role in creating skilled jobs and driving long-term regional productivity. Many are founder-led businesses at a pivotal point, looking to scale while retaining control of the culture and values that made them successful.”
She added: “Looking ahead to 2026, we continue to see strong demand for place-based capital across a broad range of sectors including healthcare services, specialist engineering and software. With more than £500 million to deploy, we expect another active year, supporting ambitious management teams with both capital and hands-on expertise.”
Barney Leaf, a corporate partner and M&S specialist at Primas Law, said: “With the interest rate now on a three-year low, PE/VC investment should pick up. Science and technology is a huge strategic priority for the North West and the sector should now be operating in a more encouraging fundraising environment. Tech and software-as-a-service has always been fairly robust and digital transformation, driven even harder by AI, offers exciting possibilities.
“Life science, on the other hand, has been starved of investment over the last few years, badly affected by high rates and people’s attention being drawn towards AI. There was also a market correction after the spike in interest caused by the pandemic, but hopefully 2026 should see a much needed injection of support.”
