On top of this, global tariffs are now emerging as a significant threat to UK businesses – and it’s regional businesses that could be the hit hardest.

While London’s economy is largely service-based, many small businesses outside the capital operate in sectors like manufacturing, advanced engineering or pharmaceutical products. These industries are far more vulnerable to the impact of tariffs on imports and exports. From raw material costs to disrupted supply chains, the ripple effect of increased trade barriers could be devastating for regional SMEs who often don’t have the same working capital headroom or buying power as larger companies.

Tariffs would add yet another pressure to an already stretched operating environment – especially for businesses for which international markets are a key factor in their growth.

Regional innovation is powering the UK economy

Innovation is thriving outside London. Cities like Oxford, Cambridge, Bristol, Manchester, and Edinburgh are home to high-growth tech, life sciences, fintech, and climate startups that are solving real global and societal problems.

These businesses are not just creating jobs and attracting talent, they’re also pulling in significant international investment. For example, between them, Oxford and Cambridge alone contribute around 7% of the UK's GDP. Whilst Bristol continues to grow as a cyber and clean tech hub and Manchester is leading in advanced manufacturing and medtech.

As a country, we must look to drive economic growth in the regions as much as in London.

We also need to better support our small businesses to ensure the UK remains the best place for them to be as they scale, to stop our most promising startups looking to Europe or the US for scaleup support or turning to acquisition as the only viable growth path.

Protecting the future of regional businesses

The global tariffs threat puts many promising regional businesses at risk, unless real support is given to them from policymakers, investors, trade bodies and business networks.

Championing regional businesses is central to the government’s levelling-up agenda but more desperately needs to be done to ensure these innovative businesses are backed with the requisite finance, investment, skills and supply chain support that they need. They also need better accessibility to and better opportunities for growth.

The Oxford-Cambridge Growth Corridor is a great example of a promising government initiative that, if delivered as intended, can transform critical areas outside of London. The ‘corridor’ is home to some of the best Artificial Intelligence, life sciences and biotech companies in the world - bringing significant talent and global investment. The recently announced Universal Studios theme park in Bedfordshire will be another huge asset for the corridor, and the trickle-down effect will give a meaningful boost to small businesses in the local area.

But for the levelling-up agenda to truly succeed, government and private investors alike need to step up to ensure that smaller, growth-stage businesses don’t get left behind.

The presence of regional angel networks and British Business Bank-backed funds is a great start – but more is needed. In particular, founders need support beyond funding: mentoring, export coaching, non-exec leadership and access to networks that help them break into new markets. And actionable trade and export support to help small businesses navigate challenges presented by global tariffs.

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