APPG for Entrepreneurship Newsletter: January 2026

With Parliament now returned from its Christmas break, it’s worth revisiting the Prime Minister’s New Year message — even if, when Sir Keir Starmer delivered it on 31 December, many of us were probably more focused on festive logistics than political rhetoric.

Permeating Starmer’s message was a vow to tackle the cost of living. For a Prime Minister under pressure, it’s not hard to understand why. More than three decades have passed since James Carville, an election strategist to the soon-to-be President Bill Clinton, coined the phrase “It’s the economy, stupid!” and it remains as true today as it did back in 1992. Recent contests suggest that ‘affordability politics’ seems to be a promising narrative with which to unite disunited electorates.

What was striking, however, was how much of the speech focused on reducing the cost of individual budget line-items — energy bills, rail fares, childcare — and how relatively little attention was paid to the other side of the equation: helping people earn more. That is surprising not least because growth is repeatedly described as the Government’s number one mission, and because two major Labour policies coming into force in 2026 are often defended precisely on the grounds that they could support higher earnings and productivity.

From April, the first key tranches of the Employment Rights Act will commence, including making parental leave a ‘day-one right’. Throughout the year and into 2027, further rights will be granted to workers. As it passed through Parliament, the Act’s likely impact was hotly contested, with most in the private sector concerned about its economic consequences. One argument that it would benefit the economy, however, was that it could actually create a more liquid labour market if it means workers aren’t worried about losing protections if they switch jobs.

A month later in May, the Renters Rights Act will come into force, again rebalancing power — this time between tenants and landlords. One of its key provisions is to allow renters to exit tenancies earlier than was typically possible in the past. Here too, advocates argue that greater flexibility could support economic dynamism, enabling workers to relocate more easily in response to job opportunities, regional growth, or changing personal circumstances.

For entrepreneurs and high-growth firms, these arguments matter. Dynamic labour markets — where people can change jobs, move cities, and take risks — are central to productivity growth. But whether these reforms will deliver that outcome in practice remains uncertain. Plausible counterarguments are easy to construct. Firms weighing up whether to make a marginal hire may become more cautious if the perceived risks of taking on new staff increase, particularly for less experienced workers. Likewise, while greater tenant flexibility may help some workers pursue new opportunities, that benefit could be undermined if landlords respond by withdrawing properties from the rental market altogether.

Nobody should begrudge the Prime Minister for wanting people to have more money in their pockets at the end of the month. But we’ll be missing a trick if we convince ourselves the only way to do that is by minimising current expenditures. For policymakers serious about growth, entrepreneurship, and long-term prosperity, the harder task is to focus on increasing real productivity. That may not make for the snappiest soundbite, but it is ultimately the only sustainable way to make people meaningfully better off.

Adviser Update

Latest news, research and events from our Advisers

The Institute of Directors published the Autumn instalment of their Director magazine — including an interview with Shadow Chancellor Mel Stride. Read it in full here.

The Campaign for Science and Engineering analysed UK Research and Innovation budget allocations, and also dug into new data on private sector R&D.

In January, The Entrepreneurs Network is hosting a meetup of entrepreneurship ecosystem builders, as well as their latest House of Lords reception to celebrate female founders.

In Parliament

Questions and comments relating to entrepreneurship this month

The Housing Secretary Matthew Pennycook gave a statement on the Government’s latest planning reforms:

“As well as setting out national planning policy in a clearer and more comprehensive manner, we are proposing a number of substantive reforms to boost housing supply and unlock economic growth in the years ahead. These include a permanent presumption in favour of sustainable development, building on the proposals outlined in our brownfield passport working paper to make development of suitable land in urban areas acceptable by default; a default yes for suitable proposals for development of land around rail stations within existing settlements and around well-connected stations outside settlements, including on green-belt land, to ensure that sufficiently dense development comes forward around existing transport infrastructure; and a targeted series of changes to drive urban and suburban densification, including through the redevelopment of corner and other low-density plots, upward extensions, infill development and residential curtilages.”

In a debate on artificial intelligence safety, Kanishka Narayan told colleagues:

“We are investing in AI to drive breakthroughs in developing new drugs, cures and treatments. But we cannot harness those opportunities without ensuring that AI is safe for the British public and businesses, nor without agency over its development. I was grateful for the points made by my hon. Friend the Member for Milton Keynes Central (Emily Darlington) on the importance of standards and the hon. Member for Harpenden and Berkhamsted (Victoria Collins) about the importance of trust. That is why the Government are determined to make the UK one of the best places to start a business, to scale up, to stay on our shores, especially for the UK AI assurance and standards market. Our trusted third-party AI assurance roadmap and AI assurance innovation fund are focused on supporting the growth of UK businesses and organisations providing innovative AI products that are proven to be safe for sale and use. We must ensure that the AI transformation happens not to the UK but with and through the UK.”

In a debate following the Autumn Budget, Callum Anderson made the case for future budgets to prioritise tax simplification:

“I will close my remarks by mentioning what I hope will be given consideration in a finance Bill in future parliamentary Sessions: the Government may wish to dedicate themselves to pro-growth and pro-enterprise tax reform. The previous Government, and indeed many Governments of different political orientations, have increased the length of the tax code, increased the number of cliff edges, complicated the tax base and, frankly, fundamentally failed to close or tackle various loopholes. As we rededicate ourselves to growth in this parliamentary Session and in future parliamentary Sessions, we would do well to ensure that simplification and fairness anchor our growth agenda.”

Jack Rankin argued higher employment taxes are driving an uptick in young people emigrating from Britain:

“In the last year to March, 176,000 people aged 16 to 34 left Britain. Net migration may be down, but that is only because young Brits are fleeing the country under this Government. This is a national crisis, and it is really a question about the future of our country. If young people do not think they can thrive, they will not put down roots and have families, and there will be no next generation to fund the pensions and public services of the future that we will all rely on. That feeling of disillusionment has not come around by accident. I would not pretend to the Minister, who gives as good as he gets, that my party delivered in some of these areas, particularly in house building and the intergenerational compact, but the past two Budgets have made things demonstrably worse. The increase to employer’s national insurance in the first Budget created a freeze on hiring, and saw vacancies down and unemployment up. The Office for Budget Responsibility has shown that this could cost almost 50,000 jobs, and stats out today show that unemployment has risen to 5.1%. Increasing the national minimum wage has an impact on hiring and it further squeezes those on middle incomes. It could mean that baristas and shop assistants are dragged into paying back their student loans despite seeing no benefit from the so-called graduate premium.”

Daisy Cooper urged a rethink on business rates to protect high-street businesses:

“The bottom line is that hospitality and high-street businesses have just two choices: they can shut up shop, or they can put up prices. There are few things that speak to the economic health of the nation and the high street more than the price of a pint. I issue a warning to the Government now: if they do not act, customers will see the £10 pint before the next general election, on Labour’s watch. I call on Ministers again to use the powers that the Government gave themselves to reduce the multiplier by the full 20p, and to make an emergency VAT cut for our hospitality businesses to boost growth, stimulate consumer confidence and help save our high streets.”

Ben Coleman called for closer alignment with the European Union to boost exports:

“We must recognise that there is no swifter route to growth than getting rid of Brexit red tape. I welcome the fact that the UK and the EU are currently negotiating an agreement to ditch much of the Brexit bureaucracy that has hit our food and drink exports and imports. I hope that will lead to lower food prices and new job opportunities for the British people. I would like to see us go even further. For example, let us boost our manufacturing industry by seeking mutual recognition with the EU of conformity assessments. Let us boost our services sector by seeking mutual recognition of professional qualifications.”

In a debate on the Technology Adoption Review, Lord Clement-Jones asked:

“In light of Sir Paul Nurse’s recent warnings that high visa fees and restrictive rules are actively deterring early career researchers and damaging the UK’s science base, will the Government commit to aligning research visa policy with their technology adoption ambitions, say, by emulating the Canada Global Impact+ Research Talent Initiative?”

In response, Baroness Lloyd of Effra said:

“The noble Lord is right that attracting high-calibre talent to this country is incredibly important. We have a number of ongoing initiatives to do that, including the Global Talent Taskforce, as well as through academia, as my noble friend the Minister with responsibility for science and technology talked about. The digital skills jobs plan will also set out how we can support that aim and get the balance right between growing homegrown talent and attracting those we need to from abroad, so that we have the best chances of growing our science base and the spin-outs.”

Looking Forward

Consultations and calls for evidence from government departments and Select Committees

Department for Science, Innovation and Technology — AI Growth Lab (Deadline: 7 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)

Industry and Regulators Committee — Regulators and growth (Deadline: 16 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)

Department for Work and Pensions — Young People and Work Report: Call for Evidence (Deadline: 30 January 2026)

Medicines and Healthcare products Regulatory Agency — Regulation of AI in Healthcare (Deadline: 2 February 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)

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)