Prime Minister Keir Starmer has resigned and will leave office within weeks. The competition to replace him begins early next month.
His resignation follows calls for his replacement from Labour Party leaders and the British public, as the PM and ruling government became increasingly unpopular.
Starmer could be replaced by former Manchester Mayor Andy Burnham, who recently won the Makerfield by-election and has been sworn in as an MP. He has confirmed he will run for the position. However, the race remains open for now.
The PM’s departure signals further uncertainty for the UK, including for its business community. Arguably, it offers up potential too, including what a new leader could do for UK SMEs.
Real Business asks SME owners their thoughts on Starmer’s resignation and what they want to see from new leadership.
“Move beyond management and start rebuilding” – Keith Griffiths, founder and CEO of The Entrepreneur Festival.
Is Keir Starmer’s resignation good or bad for UK business?
Starmer’s resignation marks another reset in a decade defined by political turnover and economic drift. For UK business, the issue is less the individual departure and more the lack of sustained leadership capable of delivering long-term growth strategy. Each transition resets priorities before structural problems are addressed, leaving productivity and investment conditions unresolved. The real test now is whether the next administration can move beyond managing economic pressure and start rebuilding a credible growth narrative.
What do you want the next leader to do for SMEs?
SME policy in the UK is still too fragmented. The next leader needs to move away from isolated interventions and build a joined-up system that recognises the challenges SMEs face at each stage of their lifecycle, from start up to exit. That means simplifying access to finance, improving procurement pathways, and reducing the operational friction that slows down scaling businesses. SMEs need a system that works end-to-end.
What should they do differently from the previous PM?
The next PM needs to take more risks and shift from managing economic stagnation to actively shaping conditions for growth. The previous approach has often felt reactive; short-term fixes layered onto long-term structural problems.
Your three-point wish list for the next leader?
First, design policy around each stage of business growth. Place as much focus on scaling capactiy as start-up incentives, including access to larger contracts, capital depth, and expansion support.
Second, remove structural friction in the economy. Prioritise simplification across tax, regulation and procurement rather than adding new programmes on top of existing complexity.
Third, stabilise the operating environment for investment. Reduce policy volatility so long-term investment decisions are not repeatedly re-priced against political change.
“Stability and a clear economic plan” – Robert Engeham, Founder and CEO of Your Company Formations.
Is Keir Starmer’s resignation good or bad for UK business?
Businesses dislike uncertainty. SMEs need confidence to invest, hire staff and grow. A prolonged leadership contest or policy vacuum can delay those decisions. What matters most is the next leader provides stability, a clear economic plan and policies that support entrepreneurship.
What do you want the next leader to do for SMEs?
Small businesses are the backbone of the UK economy, yet many entrepreneurs feel they are carrying an increasing compliance and tax burden. The next PM should focus on making it easier to start, run and grow a business rather than creating additional complexity. If the next PM wants to boost economic growth, the answer isn’t more red tape or higher costs. It’s making it easier to hire staff, easier to access finance and easier to run a business.
What should they do differently from the previous PM?
The biggest challenge facing SMEs isn’t lack of ambition, it’s rising costs and increasing administration. Many business owners spend more time dealing with compliance, tax changes and reporting requirements than they do growing their business. The next government should focus on reducing friction for small businesses rather than adding to it.
Your three-point wish list for the next leader?
First, reduce the cost of employment. The increase in employer National Insurance has been particularly challenging for SMEs. If we want businesses to create jobs, we need to make employing people more affordable, especially for companies taking on their first employees.
Second, simplify compliance and reporting. The UK remains one of the easiest places in the world to start a company, but ongoing compliance can be overwhelming for smaller businesses. I would like to see simplification of filing requirements and greater use of technology to reduce administrative burdens.
Third, improve access to banking and finance. Many new businesses, particularly those with international founders, still struggle to access banking services and affordable finance. Faster access to business banking and improved lending options will help entrepreneurs get trading sooner and contribute to economic growth.
“Lower the taxation and administrative burden” – Simon George, co-founder of Business Buzz.
Is Keir Starmer’s resignation good or bad for UK business?
Instability is never a good thing for business. We now have a period of not knowing the policies of the next prime minister, which makes it impossible to plan, which leads to lack of investment. So that cannot be a good thing.
What do you want the next leader to do for SMEs?
The taxation and administrative burden on SMEs makes it more difficult to create new jobs and growth. Lowering these is essential for the SME sector to thrive.
What should they do differently from the previous PM?
They must listen to the needs of SMEs and appreciate the contribution they make to the UK economy, there seems to be such a lack of understanding of the issues they face.
Your three-point wish list for the next leader?
First, lower taxation for SMEs, in particular National Insurance and business rates. Second, make employing people easier with less red tape, especially around ending the employment of underperforming staff. Third, listen more to representatives of small business groups who understand the issues facing SMEs.
“Give us a seat at the table” – Julaine Speight, co-owner of First Internet.
Is Keir Starmer’s resignation good or bad for UK business?
Starmer’s resignation was probably inevitable and from a business perspective, the honest answer is – it’s less about him going and more about what comes next.
What should they do differently from the previous PM?
What the next PM needs to do for SMEs is straightforward; stop treating us as an afterthought and give us a seat at the table. What should they do differently? Actually govern with a long-term economic vision rather than reacting to the next headline. Businesses can handle difficult decisions, but what we can’t handle is constant instability and U-turns.
Your three-point wish list for the next leader?
First, we need a real skills devolution and let city regions shape post-16 education to match what local employers actually need, and properly fund it.
Second, we need a creative and digital industries strategy with teeth. Not a taskforce, not a white paper, but actual investment in regional clusters and the infrastructure to support them.
Third, we need practical AI support for SMEs. Most small businesses are trying to work out how to adopt AI with very little guidance or resources. Make that easier and you’ll unlock enormous productivity gains across the regions.
“General stability and holding the line” – Dr Martin Saunders, co-founder of EdShed.
Is Keir Starmer’s resignation good or bad for UK business?
I think it’s bad. There are plenty of things that I would criticise Starmer’s government for from a business and education point of view. Things like national insurance rises and a fairly luke-warm approach to social and educational reforms. However, irrespective of the details, I recognise there has been an incredibly difficult balancing act. The western world is in turmoil and I think now is absolutely the time for a steady hand, which is sort of what we had with Starmer.
What do you want the next leader to do for SMEs?
The biggest thing I think apart from general stability is to limit some of the ever rising costs of running a small business. It’s things like business rates, national insurance and fuel prices that nibble away at a business’s finances. Support for growth, innovation and skills are also important going forwards but a lot of the opportunities, for example, grant funding red tape, the R&D tax relief changes and drive for AI over junior staff, act to inhibit that.
What should they do differently from the previous PM?
Just hold the line for now. We have a lot happening geopolitically with America, Israel, Iran, Russia and Ukraine. I think we need to ride that out and get to as strong a position as possible. Then, we’ll be able to build from a position of relative strength when the international markets allow.
Your three-point wish list for the next leader?
First, reduce costs for smaller businesses, like business rates.
Second, support domestic innovation and skills development.
Third, adequately fund the education and social care system. While not a direct business policy, our economy is stronger with a larger productive workforce and long term, this is how we get there, in my opinion.
