Death by a thousand paper cuts? Does the Budget risks disincentivising Britain’s entrepreneurs
In his maiden Budget, Chancellor John Healey stood up in the House of Commons and promised measures that would give Britain’s businesses the resources they need to start, scale and build, now and in the future.
For the UK’s 5.7 million businesses, there were some encouraging announcements including additional finance for innovative companies, the use of public procurement to drive growth and innovation, and a new Capital Gains Tax Founders’ Relief.
On paper, there is plenty to welcome. However, having built and exited a business myself, I know that entrepreneurship and creating a successful business requires more than a collection of incentives. It requires confidence and an economic environment in which taking risks, creating jobs, and reinvesting capital are genuinely rewarded. My concern is that this Budget has not yet demonstrated how the Chancellor intends to deliver that.
The Office for Budget Responsibility (OBR) forecasts growth of just 1% in 2027, following 1.2% in 2026. With Government debt forecast to reach 83.2% of GDP in 2027, public finances will continue to be under considerable pressure. This creates a challenging backdrop for businesses expected to innovate, invest and grow. Entrepreneurship inevitably involves risk, but people are less likely to take that risk if the wider economic environment doesn’t instil confidence.
One of the Budget’s most significant announcements for entrepreneurs was the introduction of Founders’ Relief, offering 10% Capital Gains Tax rate on qualifying gains up to £10 million over an individual’s lifetime. The intention is clear – to reward successful entrepreneurs and, in turn, provide incentives to encourage more people to start and grow businesses. This is principle I strongly support through my own company, The Entrepreneur Festival.
However, the proposed eligibility criteria raise questions about how widely the relief will be available; requirements around UK residency and company size, for example, could exclude many entrepreneurs. Additionally, not every successful founder retains a 25% stake as their business develops and attracts external investment.
If the objective is to encourage entrepreneurship, the incentive must be accessible to a broad range of founders, not a narrow group of businesses.
Healey also announced a £5 billion increase in the British Business Bank’s financial capacity, including £1.4 billion for equity funds supporting high growth businesses, and £450 million for a new venture debt product. This is a welcome move, as access to capital is one of the biggest challenges for businesses looking to scale.
However, finance should be accessible to businesses at every stage, not just those that fit a certain profile. At present, the additional £450 million is targeted towards high growth companies operating in industrial strategy sectors, which are seeking growth finance without giving up equity; that’s fine, but we need access to finance for a much broader range of businesses.
For me, one of the most important issues currently facing Britian’s businesses is regional growth. Having built and scaled my businesses in the North, I support the principle of ‘growth in every postcode’.
I welcome the Budget’s commitment to local investment, and its recognition that economic growth can be delivered from places outside of Westminster. My own experience in Leeds, founding, scaling and exiting UKREiiF, demonstrates what can happen when entrepreneurial ambition and local investment come together. The company brought more than £60 million in economic benefit to Leeds and the surrounding areas during my tenure, generating employment and attracting investment.
It is also why I have chosen to continue building in Leeds with my latest initiative, The Entrepreneur Festival. I want to keep backing the potential of this city, as well as the wider Northern economy, and remain passionate about the positive impact it can have on the UK’s overall economic success.
The Prime Minister and Chancellor’s commitment to driving growth in every postcode is something I wholeheartedly support. But devolution must mean more than transferring money and responsibility to local authorities. It must bring the support and resources businesses need to succeed: skills, infrastructure, access to finance and, crucially, a voice for local businesses in shaping economic priorities. A business starting in Leeds, Newcastle or Sheffield must have the same opportunity to secure investment and attract talent as those in London.
The Budget contains several measures that could make a positive difference to Britain’s entrepreneurs. What remains missing however, is a coherent national strategy that brings these initiatives together and ensures businesses across the country can benefit on an equal footing.
We need better access to finance, a stronger skills pipeline, and meaningful regional devolution. Above all, we need to recognise the wider economic contribution that founders make and close the gaps that currently exist in the entrepreneurial ecosystem.
When someone builds a successful business, the benefits can be far reaching. Businesses create jobs, develop skills, generate opportunities throughout their supply chains and boost local economies. Then, when the founder exits and starts again, that cycle repeats, creating further investment, employment and opportunities. This virtuous cycle of reinvestment is one of the most valuable drivers of economic growth.
The Chancellor has acknowledged that Britain needs more wealth creators. I agree completely but they will not emerge simply because a batch of narrow incentives are announced. Founders need to believe that Britain is a place where ambition and risk taking is rewarded, guidance and investment is available, and the whole ecosystem supports growth and success.
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