APPG for Entrepreneurship Newsletter: December 2025
/After weeks of briefings and counter-briefings, Chancellor of the Exchequer Rachel Reeves delivered the Autumn Budget last Wednesday. In this month’s newsletter, we’ll take a look at the parts that matter most to Britain’s entrepreneurs, alongside verdicts from some of our Advisers.
We can start auspiciously. Unveiled in tandem with the Budget was Reeves’ entrepreneurship adviser Alex Depledge’s self-dubbed “Love Letter to Entrepreneurs” – which absolutely lives up to its billing. In its foreword from the Chancellor, while noting that Britain has “no shortage of ideas or talent,” there’s a recognition that things aren’t working as well as they could be for founders restless to see their businesses grow. As Reeves puts it:
“Somewhere along the way – in business and in government – we have become too focussed on managing the downside and not nearly focussed enough on maximising the upside. We have built systems around caution, not conviction. Around stasis, not momentum.”
Entrepreneurs will welcome the candour, and the rhetoric that suggests the Government really does understand the fundamentals that underpin successful startup ecosystems – dynamism, innovation, and risk. But what they should be happiest about are the policy wins that Depledge has managed to chalk up. Among other things, these include: doubling the eligibility for the Enterprise Investment Scheme, Venture Capital Trust scheme and the Enterprise Management Incentive scheme; harnessing new funding models for spurring innovation in procurement; and introducing a new UK Listings Relief, allowing newly listed firms to be exempt from Stamp Duty Reserve Tax on their shares for three years.
All of these measures firmly point the country in a better direction. They are not, however, without critique. The BVCA’s Chris Elphicke, for instance, calls the reduction of upfront income tax relief for VCTs a ‘fly in the ointment’, while Startup Coalition would have liked to see Stamp Duty on shares abolished entirely.
It should also be said that Depledge’s “Love Letter” is only one part of a much larger Budget. And it’s in these other aspects that the business groups were generally less enthusiastic. Each of the CBI, FSB and IoD bemoaned the fact that taxes are forecast to hit new highs in years to come. Philip Salter of The Entrepreneurs Network lamented not only the growing overall tax burden, but also how the Budget failed “to deliver the fundamental tax reform the system desperately needs.” In their response, the Campaign for Science and Engineering focused on the new International Student Levy, which will charge foreign students £925 per year, and, they warn, ultimately damage universities’ ability to invest in R&D.
Given the diversity of Britain’s economy, no budget will ever please everyone. There will always be winners and losers. All things considered, though, most entrepreneurs probably came away from last Wednesday more optimistic than when they went in – thankful for the pro-startup policies it included, and perhaps even more relieved about the anti-startup ones it did not. But that doesn’t mean everything is rosy. Even the most adept founders will see their startups’ trajectories limited by the rate of growth experienced in the wider world around them. If the economy fails to click into gear, the likelihood of further, harsher tax hikes only increases, and the Chancellor will find it harder to offer incentives for expansion.
For all our sakes, let’s hope the measures on the positive side of the ledger will be enough to stave off decline.
Adviser Update
Latest news, research and events from our Advisers
The Entrepreneurs Network published their latest Job Creators report – revealing the disproportionate role foreign-born founders play in Britain’s entrepreneurial ecosystem. They also unveiled the latest edition of their Entrepreneurs Survey.
The Campaign for Science and Engineering launched their Public Attitudes to R&D 2025 report. On 10 February 2026, they will also hold a conference to celebrate their 40th anniversary.
Enterprise Nation issued the results of their latest Small Business Barometer. Read them in full here.
Innovation Growth Lab published analysis of how Alphafold 2 has contributed to the acceleration of research and scientific impact.
In Parliament
Questions and comments relating to entrepreneurship this month
In a Lords debate on economic growth and taxation, Lord Elliott argued that the tax landscape is driving up emigration of entrepreneurs:
“The final factor we need for economic growth is abundant enterprise, and taxation is a crucial driver of that. In 1998, Gordon Brown introduced taper relief for capital gains tax. This scheme incentivised long-term investment and had no lifetime limit on holding assets, with a long-term CGT rate of just 10%. Today the picture is very different. From next April, the rate will be 18% up to £1 million and 24% beyond that. We need to acknowledge the impact that these and other changes to incentives have on our economy. As we see the rise of remote working, the mobility of people must be a key consideration when making any tax changes. This is already happening, with 16,500 high net worth individuals, many of them entrepreneurs and investors, expected to leave the UK in this year alone.”
In a Lords debate on visas for highly skilled people, Lord Fox asked:
“[T]eams of researchers contain all sorts of different people, but some of the key people are not necessarily the best paid people in that team, and those salary restrictions may well not meet the Home Office’s criteria. What is the Home Office doing to work with the taskforce to make sure that a whole team can come to the United Kingdom, which would probably affect whether it came or not?”
In response, Lord Lemos said:
“[T]his is all currently under consultation. We will, of course, look at all the routes in the way the noble Lord asks me to. To be clear, salary levels are not the only things that will influence our approach to global talent, high-potential individuals and the various schemes that we have. As I have already said, we will be careful to avoid the unintended consequences.”
In a Lords debate on private equity, Baroness Moyo argued:
“[T]oday, in the UK context, private equity faces challenges, including finding a route to sell companies it has invested in and nurtured. This is, in part, due to the UK’s capital markets having weakened and investor interest in IPOs and public markets falling away. Worryingly, this year the United Kingdom has fallen out of the world’s top 20 IPO markets. Additionally, private equity investors are struggling to find promising new UK companies to invest in, highlighting burdensome regulation that ultimately holds back growth and puts the UK at a distinct disadvantage in the global competition for investment capital.”
In a Commons debate on specialist manufacturing, Josh Fenton-Glynne cited the impact tariffs are having on businesses:
“It will come as a relief to many Members that I am not in the Treasury, so rather than talking about statistics, I will share what local manufacturers tell me. They tell me that their order book has never been so bad, because of the impact of tariffs. The lack of stability means companies are not making long-term decisions that would see them step up. That is why we need a strong domestic manufacturing sector, but it is also why we need to be strategic in our support for the industry and how we spend our money on the infrastructure that we need to rebuild.”
In a Lords debate on military procurement, Lord Cromwell asked:
“Can the Minister tell the House how the defence industrial strategy will engage with SMEs, for example in supplier networks such as the neutral vendor framework for innovation?”
In response, Lord Coaker said:
“We have established and are looking to grow a defence office for small business, which will be important. The noble Lord’s point is an extremely good one. The idea that the solution is always massive business has been shown by Ukraine not to be the case. The development of small business and small industry—the noble Lord gave the example of drone manufacture on a small-time basis—has been essential to the Ukrainian effort against the illegal Russian threat. His point about how we can develop that sort of capability and capacity is important for us all and something we need to learn from.”
In a debate on the Budget, Ed Davey argued:
“The Government know the damage that the Conservative-Reform Brexit deal has done to every family and business across our country, yet they choose to reject the single biggest policy for ending the cost of living crisis, turbocharging economic growth and boosting tax revenues without raising tax: a new trade deal with Europe. We need to properly fix our broken relationship with Europe, with a new customs union. We can grow our economy by freeing British businesses from the costs, barriers and red tape favoured by the Conservatives and Reform. Rather than trying to tax our way out of debt, as Labour is choosing to do, the Liberal Democrats would grow our way out of debt.”
In topical questions, Ian Sollom asked:
“The UK’s universities do indeed produce world-class research, but I would suggest that we are still missing too many opportunities in commercialisation. The Government’s proof of concept fund is really quite inadequate—from the figures, it is 30 times oversubscribed—and equity and intellectual property arrangements are laborious and deter both investors and entrepreneurs. Will the Secretary of State commit to expanding that proof of concept funding and reforming those barriers that hold back university spin-outs?”
In response, Liz Kendall said:
“[W]e do not lack in great ideas or great start-ups in this country. We need to support them better to scale up, and that is what the Government are doing across a range of sectors. The hon. Gentleman can look at the actions we are taking on UK pension schemes, to get them to invest more in UK companies, and in the Treasury and across the board. I am sure there is more we can do, but it is absolutely at the top of our agenda.”
Looking Forward
Consultations and calls for evidence from government departments and Select Committees
Business and Trade Committee – Priorities of the Business and Trade Committee for 2026 (Deadline: 5 December 2025)
Home Office – Extending the Right to Work Scheme (Deadline: 10 December 2025)
Department for Business and Trade – Unlocking business: reform driven by you (Deadline: 16 December 2025)
Department for Business and Trade – Make Work Pay: trade union right of access (Deadline: 18 December 2025)
Department for Business and Trade – Make Work Pay: duty to inform workers of right to join a union (Deadline: 18 December 2025)
Department for Science, Innovation and Technology – AI Growth Lab (Deadline: 2 January 2026)
Industry and Regulators Committee – Regulators and growth (Deadline: 9 January 2026)
Treasury Committee – Financial Inclusion Strategy (Deadline: 12 January 2026)
Department for Business and Trade – Make Work Pay: leave for bereavement including pregnancy loss (Deadline: 15 January 2026)
Department for Business and Trade – British Industrial Competitiveness Scheme: consultation on scheme eligibility and approach (Deadline: 19 January 2026)
Justice and Home Affairs Committee – Settlement, Citizenship and Integration (Deadline: 23 January 2026)
Office for National Statistics – Census 2031 Topic Consultation (Deadline: 4 February 2026)
HM Treasury – Business Rates and Investment: Call for Evidence (Deadline: 18 February 2026)
Department for Business and Trade – Business support for co-operatives and non-financial mutuals (Deadline: 18 February 2026)
Department for Education – International student levy technical detail (Deadline: 18 February 2026)
Ministry of Housing, Communities and Local Government and HM Treasury – Visitor levy in England (Deadline: 18 February 2026)
HM Treasury – Tax Support for Entrepreneurs: Call for Evidence (Deadline: 28 February 2026)
HM Treasury – Reforming the customs treatment of low value imports into the United Kingdom (Deadline: 6 March 2026)