What do SMEs think about the chancellor?

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Mark Pawlak for Adfero

Philip Hammond hasn't been the chancellor of the Exchequer for very long, whereas his predecessor was in the role for six years.

As a result, many small and medium-sized enterprises (SMEs) do not quite know what to make of the chancellor just yet and wonder what he might say in this week's Autumn Statement.

According to research by by strategic consultancy Lansons, just 27 per cent believe Mr Hammond is capable of managing the economy properly.

Interestingly, 20 per cent of SME owners said they trusted the previous chancellor George Osborne more.

But perhaps most damningly for the Conservative government, 34 per cent said they trusted neither Mr Hammond or Mr Osborne.

The findings might suggest that Mr Hammond simply needs to boost his profile among SMEs in order to command more trust and confidence.

Indeed, 57 per cent of SME owners polled said they are not familiar with the chancellor, while only 41 per cent said they do feel familiar with him in some way.

James Dowling, head of public policy at Lansons, commented: "Our country’s small businesses are looking for a lead, yet 57 per cent of them say they are unfamiliar with the chancellor - the man charged with steering the economy. 

"The Autumn Statement is an opportunity to change this. If he is to succeed, Hammond needs to use it dramatically to build his profile and confidence among SMEs.”

The study also looked at what SMEs want to see from the chancellor in his keynote speech.

More than one in three said medium term economic certainty for the markets is the most pressing matter at the moment.

SMEs also raised concerns with the rising cost of living, which might explain why 36 per cent backed an increase in the income tax personal allowance, while 22 per cent said they want Mr Hammond to announce cuts in fuel duty.

The possibility of the UK slipping into recession following Brexit also remains a concern among many small business operators throughout the country.

Ahead of the referendum on Britain's membership of the European Union (EU) in June, 43 per cent of SME owners predicted a recession in the event of Brexit.

The proportion holding this view remains largely the same - 41 per cent - now that the government is actually gearing up to commence the process of leaving the EU next year.

Some 65 per cent of respondents said they believe the outcome of the referendum would have a negative impact on the UK economy.

The survey comes shortly after the Federation of Small Businesses urged Mr Hammond to make SMEs a priority in the Autumn Statement, as confidence among this group recently fell into negative territory for the first time since 2012.

This, it said, was driven by a number of factors, such as a weakening domestic economy, pensions auto-enrolment, rising labour costs and a business rates re-evaluation, as well as June's referendum result.