APPG for Entrepreneurship Newsletter: February 2026

Last week, readers of The Times and The Economist were treated to a pair of articles about Britain’s startup prowess that struck a similar chord. First, talk of Britain’s economic demise is overegged — and with respect to generating new, exciting, investable companies, few do it better than the United Kingdom. Second, nurturing a dynamic ecosystem of ambitious founders isn’t simply a matter of setting a competitive tax regime or creating a permissive regulatory environment. A whole panoply of factors needs to be present, many of which will be far removed from typical ‘business policy’ concerns.

Take crime, for instance. Nobody wants to live in an unsafe neighbourhood. It’s an underrated part of Britain’s lure to founders, investors and other savvy sorts, therefore, that our cities are, on the whole, far safer than many equivalents in the United States and Europe. Despite what you might hear about our capital, you’re much more likely to be a victim of a violent crime in San Francisco than in London.

Or education. While many startup founders’ exam days are long behind them, those with children will naturally want to make sure they’re taught well. If we look at PISA rankings — which evaluate educational systems based on pupils’ performance on mathematics, science and reading at age 15 — the UK outdoes almost all European nations, while beating the US on mathematics and science. Meanwhile, at the university level, Britain famously punches well above its weight, and the intellectual crucibles of Oxford and Cambridge offer innovators an attractive alternative to London if they’re more their speed.

Entrepreneurs might be some of the most time-scarce people in the world, but when they do have a moment to spare, there are few better places in which to relax than Britain. We boast some of the most visited museums, art galleries, theatres, music venues and sports grounds in the world. Our restaurant scene is impeccable. While it may rain a little more than we like (though it’s actually drier than you might think), it’s hardly ever too hot or too cold (and if you fancy a temporary change of scenery, Heathrow is the globe’s most connected airport).

With all this in mind, what should the takeaway be for policymakers? First and foremost, I think we should remember that even top entrepreneurs are not simply inert inputs we throw into a machine and receive wonderful goods and services from. While a handful may be willing to grind out work with little regard to what’s going on around them, the majority are perfectly ordinary human beings. As much as they care about growing their startups, they also want to enjoy their lives — making friends, raising a family, finding meaning, and so on.

So by all means let’s make sure founders know Britain is open for business. Ministers are well versed in championing measures like the Seed Enterprise Investment Scheme or the creation of the Regulatory Innovation Office, and long may that continue. But I wonder if we’re missing a trick by not shouting more about what else we get right — the ‘softer’, less replicable advantages that can’t be legislated for at the simple stroke of a minister’s pen.

Second, throughout writing this newsletter, I’ve been acutely aware that many of Britain’s selling-points are, if we’re being honest, applicable only to London. I’m breaking no new ground to say that we should think carefully about how to spread opportunity across the entire nation. How to do that, exactly, is a far harder task, and will require much more than fine rhetoric.

On this point, another recent piece, from Andy Haldane in the Financial Times, gives us a good starting point. While I don’t agree with everything he writes, I am highly sympathetic to the idea that greater devolution to city-region mayors could pay dividends. As Britain Remade’s Sam Dumitriu recently noted, affording them more control over taxation and planning policy could prove to be a powerful pro-growth measure — if mayors know they’ll reap more of the financial rewards that result from authorising fresh developments or enticing in new earners, they’ll be much more likely to do so.

Agglomeration, as I’ve written about before, is a central feature of economic growth. For entrepreneurs in particular, being in close proximity to likeminded people is essential. Something that’s implicit, but not always given enough attention, when discussing agglomeration is that creating places where people want to converge really does matter. That’s not something any single politician can centrally plan — it will require officials focusing efforts across a range of policy domains to get things right.

Adviser Update

Latest news, research and events from our Advisers

The Campaign for Science and Engineering published new research on public attitudes to R&D and businesses. They will also be holding a conference to celebrate their 40th birthday on 10 February.

On 25 February, the CBI will convene business leaders, policymakers and stakeholders from across the innovation ecosystem at the release of their upcoming report on investing in innovation. Learn more here.

The Entrepreneurs Network and Barclays unveiled their latest report from the Female Founders Forum, which examined the experiences of female academic entrepreneurs when it comes to spinning out research.

The Institute of Directors published three reports — one on non-executive directors, another on AI governance in the boardroom, and a Code of Conduct for directors.

The Enterprise Research Centre added videos from their latest State of Small Business Britain conference to YouTube. Watch them all here.

The Centre for Entrepreneurs, working with Innovate UK, has launched the Incubator and Accelerator survey for 2026. If you help run a startup incubator, accelerator, training programme, meet up or mentoring scheme, please consider taking a few minutes to help them understand how the sector is doing.

In Parliament

Questions and comments relating to entrepreneurship this month

In a debate on the Retail and Hospitality Sector, Lord Borwick said:

“Behind every retail shop and every hospitality pub is an entrepreneur. They need to be encouraged. If we are lucky, she or he will be a driven individual, determined to do well despite problems. These entrepreneurs feel unappreciated —so many of them are leaving for places such as Dubai because of government policy. This happened in the 1960s and was called the brain drain. Their children, the entrepreneurs of the future, may easily never come back.”

In a debate on the Defence Industry, Luke Charters MP said:

“The challenges we have talked about in procurement, ESG and access to finance hit SMEs the hardest. They do not have big teams of financial experts, and the larger primes can navigate the challenges more easily as they have access to wider capital pools that the smaller firms do not. There is a risk of strategic contradiction, because on the one hand we are asking defence firms to scale, innovate and deliver at pace, but on the other hand we seem to be tolerating a financial system that treats some firms as a reputational liability. That is not sustainable, to borrow a term. The issue is not necessarily ESG principles themselves, but the absence of clarity in how lenders apply their risk tolerance to defence. ESG concerns are only one part of the financing challenge facing defence firms, alongside credit risk, contracting structures and cash flow, but they are the tip of the iceberg. Because these issues are often poorly defined, they create uncertainty that deters lending.”

In a debate on Superintelligent AI, Lord Hunt said:

“I stress, particularly to my noble friend, that I am no Luddite when it comes to AI. It can bring unprecedented progress, boost our economy and improve public services. We are number three in the global rankings for investment in AI. I understand why the Government do not want to seem to be overregulating this sector when it is so important that we develop innovation and investment in the UK, but we cannot ignore the huge risks that superintelligent AI—or ASI, as I will call it—may bring. I am using this debate to urge the Government to consider building safeguards into ASI development to ensure that it proceeds only in a safe and controllable manner, and to seek international agreement on it.”

In a debate on cryptoassets, Lord Holmes said:

“At stake is a growth matter and a global economic matter. This is a way to effectively change how government debt is treated in a material way for the economy. More broadly, in considering the whole issue around crypto and digital assets, having even greater clarity from the Government, beyond growth and innovation, and making a clear statement as to what we want as the UK—what position we want to play when it comes to cryptocurrencies, assets, digital assets and stablecoins, sharpening the arrowhead of the Government’s mission—would be incredibly helpful across this industry. We have an extraordinary opportunity that we can take only if we make the changes to these regulations.”

Answering questions about a Digital Identity Scheme, Josh Simons MP said:

“By the end of this Parliament, every UK citizen who wants a digital ID will be able to get one free of charge. To deliver that, we will launch a huge digital inclusion drive across the UK, and I look forward to working with hon. Members from across the House on that, including my hon. Friend. Like Estonia, we will build the UK system to earn citizens’ trust, adhering to the principles of data minimisation and decentralisation with strong safeguards in place. We will consult imminently on how best to design that system.”

In a debate on Youth Unemployment, Joy Morrissey MP said:

“We have rising youth unemployment, and the issue is taxation. Our businesses are facing an increased national insurance rate, and business rates on the high street are high. Hospitality and retail businesses are being taxed to the point where they cannot take on another employee, and usually that employee is a young person who is being given their first opportunity. The Government are making the job market so rigid and protecting workers’ rights to the point where there will be no jobs available by the time young people are looking to get into employment. The Government are making it so restrictive that businesses do not want to take on new employees. First, they are not able to afford to and, secondly, there is so much restriction when they go to hire a new employee that they just will not do it. That will not be dealt with, and youth unemployment will continue to rise.”

In a debate on startups, Lord Hunt asked:

“My Lords, does the Minister share my concern that an increasing number of entrepreneurs are saying that Britain is becoming an increasingly unattractive place to grow a business? Given that AI start-ups, in particular, depend on access to powerful data centres for success, the principal barrier that she could address is that we have the highest electricity prices in Europe. Will she now set out a clear strategy to reduce electricity costs so that AI companies can realistically build scale and remain in Britain?”

To which Baroness Lloyd replied:

“Our approach to the AI opportunity is comprehensive. It includes the AI growth zones which are being announced and include full access to energy as part of the package as well as local skills packages of £5 million per area to ensure that local areas benefit from these AI growth zones.”

Looking Forward

Consultations and calls for evidence from government departments and Select Committees

Office for National Statistics — Census 2031 Topic Consultation (Deadline: 4 February 2026)

Public Accounts Committee — Youth employment, education and training (Deadline: 12 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)

Public Accounts Committee — Unlocking land for housing (Deadline: 23 February 2026)

Public Accounts Committee — Access to Work Scheme (Deadline: 23 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)

Financial Services Regulation Committee — Growth and proposed regulation of stablecoins in the UK (Deadline: 11 March 2026)