Roundtable Discusses Challenges Facing Business in the Year Ahead
Greater Manchester Chamber of Commerce hosted a roundtable in partnership with British Chambers of Commerce and AAB in January.
The event was a valuable opportunity for senior leaders to share insights and explore the practical realities facing UK businesses today.
Topics discussed included:
• Business confidence and the ongoing impact of National Insurance rises
• Recruitment, retention and the state of the UK labour market
• Corporate tax policy and its implications for business strategy
• The impact of new technology on businesses
State of the Economy
Subrahmaniam Krishnan-Harihara, Director of Business Policy and Research at Greater Manchester Chamber of Commerce, opened the meeting by talking about the current business environment in the UK. He gave an overview of the results of the Chamber’s latest Quarterly Economic Survey. He said that in December the GM Index stood at 14.9 - a marked contrast to +33.9% in 2022 and a significant recovery from its lockdown low of –32. But despite this improvement, growth had been minimal. He said businesses were operating cautiously. Ongoing market volatility had led many to hold onto limited cash reserves rather than invest, resulting in stifled investment across the economy. Rising costs, uncertainty and pressure on margins had forced companies to work harder, particularly throughout 2025, which proved challenging for many sectors. He warned that businesses in the country as a whole were not investing enough and were holding on to their money.
Following Subrahmaniam’s introduction, attendees heard about how AAB helps businesses deal with tariffs, audits and financial problems. They were told AAB had 1100 staff members and 17 locations regionally and supported firms in the law, hospitality and oil sectors across the UK. It was said that while law firms were thriving, having seen 9% growth in the past year, hospitality and retail were struggling due to changes in lifestyle and new technology. The AAB presentation ended with information about the changes in National Insurance.
Subrahmaniam then asked for opinions on the state of the economy from around the table. A key discussion point was how businesses could balance caution with development. Some argued companies must adapt with the times, focusing on growth and operational change rather than being paralysed by taxes, inflation and regulation. One positive was that inflation in the UK was easing and becoming more stable, but its legacy effects remained, especially as costs had risen by around 10%, while prices cannot increase by more than 3%.
Performance across sectors was felt to be uneven. Law and technology were performing strongly, benefiting from demand and innovation, while hospitality was struggling severely, facing rising costs, staffing pressures and limited pricing power.
Rising Costs
Attendees said the impact of National Insurance increases and higher Minimum Wage levels had been significant, placing additional strain on employers. As a result, it was seen as a good time to be a tax adviser, given the complexity businesses now face.
There were complaints that changes to tax in the UK were happening all the time. One attendee commented that many people were not investing due to the impact of President Trump’s policies on Europe’s economy.
Businesses were said to becoming tired of the constant changes and were running out of energy but were staying resilient. Changes to inheritance tax meant family businesses were struggling more. And businesses were beginning to buy properties instead of renting, not only because it held financial value, but also emotional value and because it was an easier debt to pay off.
It was stated that many people were moving to different countries and taking their businesses with them, meaning they were paying less tax. This meant that the UK was losing out on a lot of money because it wasn’t getting these business owners’ contributions, meaning taxes had to increase to make up for the lost revenue.
Skills and Investment
One attendee commented that if businesses were hitting their breakeven point, it was a win for them and equals growth. He stated that businesses must be resilient through change and see it through. He added that there were lots of opportunities for businesses to change and save money. He went on to say that people were not making the best decisions within colleges to help young people understand the economy and how to run a business. Young people were learning but were not learning the crucial information for life.
Subrahmaniam stated that there was much hesitancy within the business world and businesses needed stop hesitating because it was preventing them growing and expanding. He added that employers needed to invest in better training for their staff.
Another attendee talked about construction and said that many building projects in the UK were stalling and not being completed, going against government promises.
There was also discussion about how a lot of investment was coming into training for the construction industries. It was said that Manchester was the place to be for investing as it was constantly growing.
One attendee spoke about road tax for electric vehicles and why businesses could choose to become electric. He added that the increase in the Minimum Wage was hurting businesses significantly and employers were hiring fewer young people because they were more expensive but had less experience. He said graduates were also struggling to get employment due to high wage prices. He then talked about statistics, saying corporate tax even at the bottom was 25%. He then stated that a third of clients were prepared to invest and ready to face challenges, while the other two thirds were not prepared to take risks and were waiting to save as much as possible. He said decisions also depended on people’s ages, because the younger you were, the less likely you were to take risks due to your inexperience, and the older you were, the more likely you were not to invest and want to save as much as possible.
Another attendee said that the x factor was the mindset of the owners of a business. He added that many decisions were being made about survival. He then said that many new skills were emerging in businesses, such as AI, IT skills and new data management skills that staff needed to learn but change always happens in the business world and always will. He ended by saying risks needed to be taken in business, especially in Manchester due to the city’s travel links, investment opportunities and economic position within the UK.
Someone from the legal sector highlighted how valuable skills were in business and said recruitment was very difficult at the moment due to staff being less skilled. They also said that training people was very difficult because once they were trained, London businesses poached staff, meaning the money spent on training was wasted. They then moved on to talking about how risks were being avoided and how there were lots of other issues within SMEs, such as people moving to different countries, which was sucking skills out of the business and out of the country. A few people then proceeded to speak about how many businesses were not making money but were just coasting. They ended by saying that if businesses were accused of any type of fraud, then a lot of money would be lost, even if they were proven innocent due to court expenses and money taken.
There was discussion about the big aims for 2026, such as getting hospitality to commit to spending and investing and removing fear factors from businesses. This was followed by a conversation about the Government and how they needed to treat the UK like a business. It was also said the Government needed to think like businesses and start helping the country instead of trying to get more money out of businesses. It was also felt that the support from the Government needed to improve.
Technology
Artificial Intelligence featured prominently in discussions, with attendees debating how it could be used effectively, its implications for staff and whether it offered genuine cost efficiency. A big talking point was what AI is, with tech experts believing many people saw AI as only being ChatGPT, when in fact that was just the tip of the iceberg. For many businesses, AI represented both an opportunity for productivity gains and a strategic challenge requiring careful implementation.
Some felt AI was over-used. There was then a counter argument that AI was so much broader than people thought and could help with everything within businesses, from replacing some roles to shortening the time taken to complete tasks from four days to 40 minutes. But others said people were losing their own skills and relying on AI to take over their jobs, which was removing the personal element within business.
Conclusion
Subrahmaniam brought the meeting to a close with a summary of what had been discussed. Overall, people felt the UK economy was showing signs of stabilisation, but growth remained fragile. It was felt businesses were navigating a complex landscape of rising costs, cautious investment and rapid technological change while identifying opportunities to adapt and remain competitive.
