APPG for Entrepreneurship Newsletter: May 2026

The ambition that Britain should be ‘the best place in the world to start and grow a business’ has become something of a mantra across government in recent months.

It’s a laudable one — and is, on paper at least, backed by serious commitments such as the £500 million Sovereign AI Fund and £7 billion for UKRI to support the growth and commercialisation of innovative companies.

And yet, when you actually sit down with founders — which is, after all, rather the point of this APPG — you hear a strikingly different story. The UBS Global Entrepreneur Report 2026 recently found that just 7 per cent of European entrepreneurs believe government policy supports their industry. That chimes with an ongoing pulse taken by The Entrepreneurs Network, which consistently finds that very few founders in the UK believe politicians are attuned to the needs of entrepreneurs.

Two recent roundtables, taken together, paint a vivid picture of that disconnect — and the importance of having founders in the room where decisions are made.

The first, hosted by The Entrepreneurs Network and Mishcon de Reya and chaired by the Rt Hon. Lord Willetts, brought together some of the UK’s leading robotics founders with the Regulatory Innovation Office (RIO). Founders described a system in which the entire burden of risk falls on the innovator, where advance guidance is either unavailable or invisible, and where how a technology is classified can matter more than how it actually works. A surgical robot that moves autonomously near patients faces a more enabling framework than a delivery robot trundling down a pavement, simply because one is categorised as a medical device and the other falls into a regulatory no-man’s-land.

The second roundtable was our APPG evidence session on R&D tax relief, chaired by Lord Marks of Hale.

The R&D tax relief system is, in principle, one of the UK’s most important tools for incentivising innovation. Yet the number of SME claims has fallen by roughly 50 per cent over the past three years. Founders described a system so weighed down by complexity, constant rule changes and the fear of retrospective investigation that some have simply stopped claiming altogether.

One founder, whose company had been approved five years running, told us that the prospect of a retrospective enquiry — potentially clawing back hundreds of thousands of pounds — kept him up at night. Several noted that HMRC investigators often lack the sector-specific expertise to assess the claims they are scrutinising, leading to drawn-out enquiries that drain time, money and morale.

They are the kinds of barriers that cause promising companies to plateau at modest valuations, or to decamp to the United States once they reach a certain scale.

Importantly, they are precisely the sorts of insights that risk getting lost if policymakers rely solely on strategy documents and consultation responses rather than hearing directly from the people trying to build things. When founders are in the room, it leads to dialogue; information mentioned in passing, and which may seem of limited importance, can be interrogated. Sometimes it proves to be the most important.

As the APPG for Entrepreneurship, we aim to ensure that the voices of founders are heard. That’s why we’re hosting more of these sessions, such as on entrepreneurship in financially excluded communities. It’s also encouraging that RIO has launched the second phase of its Front Door pilot to provide entrepreneurs with an opportunity to tell the government directly about regulatory barriers holding businesses back.

Adviser Update

Latest news, research and events from our Advisers

Applications are open to the Royal Academy of Engineering’s Shott Scale Up Accelerator. This will provide access to a network of mentors from the UK’s industry leaders, who have founded, scaled and sold businesses. Applications are open until 18 May 2026.

In a new report, the Campaign for Science and Engineering asks what kind of R&D system the UK wants and needs over the coming decades. They have also published analysis of government R&D expenditure.

In May, The Entrepreneurs Network is hosting An Audience with Tom Adeyoola, Executive Chair of Innovate UK.

APPG Adviser Raphael Dennett, Deputy Director of the Centre for Entrepreneurship at the University of Exeter, argues that Britain’s workforce is unprepared for the rapid, poorly managed transition resulting from AI.

In Parliament

Questions and comments relating to entrepreneurship this month

In a debate on global trade and support for businesses, Mark Garnier made the case that the overinterpretation of rules has led to risk aversion in the City:

“[O]verinterpretation of rules and regulations has led to banks being nervous of taking risks, and that has slowed growth in the City and holds up international trade. For example, overinterpretation of anti-money laundering rules means that foreign inward remittances can take up to two weeks to clear into a UK bank account, while poor classification of risk-rated assets potentially starves businesses of growth debt capital.”

In a debate on the economic impacts of events in the Middle East, Baroness Neville-Rolfe highlighted the impact of the UK’s high energy costs on SMEs:

“From an energy perspective, Britain could scarcely be entering this crisis in a weaker position. We face the highest industrial energy costs in the developed world, crippling our manufacturing industries and making life very difficult for our SMEs—and consumer prices are not far behind. This is a dangerous position to be in, and I gently say to the Minister that the public will not thank the Government for ideological gestures. They will expect, and they deserve, practical action to secure our energy future.”

In a debate on the UK-India Technology Security Initiative, Kanishka Narayan said:

“It is no exaggeration to say that our future prosperity depends on our ability to drive innovation-led growth, to secure the supply chains and technologies on which our economy relies and to build a strong research base and skills future so that British people and businesses can thrive. The UK cannot deliver those objectives alone. The technologies that will define the coming decades are global by nature, and success depends on our trusted partnerships.”

In a debate on women’s health strategy, Baroness Merron said:

“Through the strategy, our approach will be to research and development that actually works for, but also empowers, women. That is why I am glad we will be launching a femtech challenge fund. We want to accelerate the adoption of innovations and make sure they transform women’s healthcare. There is also an accelerator for female founders, and that is also key.”

Looking Forward

Consultations and calls for evidence from government departments and Select Committees

HM Revenue and Customs — Cryptoasset taxation — stablecoins (Deadline: 7 May 2026)

Ministry of Housing, Communities and Local Government — Fees for planning applications (Deadline: 18 May 2026)

Department for Business and Trade — Make Work Pay: threshold for triggering collective redundancy obligations (Deadline: 21 May 2026)

HM Revenue and Customs — Modernising and standardising company tax returns (Deadline: 2 June 2026)

HM Revenue and Customs — Business Systems Integration (Deadline: 2 June 2026)

HM Revenue and Customs — Extend Notification of Uncertain Tax Treatment (UTT) regime (Deadline: 4 June 2026)

HM Revenue and Customs — Reporting company payments to participators (Deadline: 10 June 2026)

HM Treasury — Advance Corporation Tax Reform (Deadline: 11 June 2026)

Insolvency Service — Corporate Civil Enforcement Reforms Consultation (Deadline: 17 June 2026)

Department for Business and Trade — Open for business: implementing a UK corporate re-domiciliation regime (Deadline: 19 June 2026)