Last week’s Budget came with a new prospectus for founders, entitled Entrepreneurship in the UK: Start. Scale. Stay. It views starting a business as a strength the UK already has, and measures success by whether founders scale and stay in Britain.
In a new inquiry, the Business, Innovation, Science and Trade Committee has turned its focus to the first of those three words. It follows the Committee’s work on the Small Business Strategy and on investing in the UK economy, which examined how firms grow and raise scale-up finance. Now it is studying the start-up phase — specifically, how people start businesses, what conditions support them and how well government policy works.
The Committee is chaired by Liam Byrne, who previously chaired this APPG when it published its report on tax reform in 2018. Byrne has framed the inquiry around fairness. A person’s chance to build a business, he says, should depend on “your ideas and effort, not your postcode or your parents’ bank balance”. The inquiry covers market traders, online sellers and self-employed tradespeople, not only technology founders.
In June, we wrote that Britain excels at starting businesses. New evidence bears that out. At the Committee’s first session last week, Professor Mark Hart, who leads the Global Entrepreneurship Monitor in the UK, reported that early-stage entrepreneurial activity rose from 12% of adults in 2024 to 16.8% in 2025, the highest since the survey began in 1999. Young people and women led the increase, and the share of new entrepreneurs with growth ambitions has more than doubled in three years, to 35%.
Starting, though, is only the first step. The same research finds the UK’s global ranking for its entrepreneurial ecosystem has slipped from 29th to 37th, with weaknesses in finance, business support and entrepreneurial education. Women and ethnic minority founders still face greater barriers to finance. Hart’s message to MPs was that the challenge now is helping new businesses survive and grow. The Entrepreneurs Network’s founder, Philip Salter, gave evidence on the same panel, alongside Professor Monder Ram of the Centre for Research in Ethnic Minority Entrepreneurship at Aston University and Jordan Dargue of Lifted Ventures.
Entrepreneurship in the UK: Start. Scale. Stay. is clear in its focus on innovative, high-growth firms, in line with other parts of government strategy such as Innovate UK’s prospectus, published back in March.
The Committee’s lens is wider, however, and its interest in the skilled trades is welcome. For many businesses, the decisive step is not the first sale but the first hire. At the start of 2025, three quarters of the UK’s 5.7 million private sector businesses employed no one but their owners, and since 2010 non-employers have accounted for 84% of the growth in business numbers. For a plumber or electrician, a first employee brings payroll, pension auto-enrolment and employment law all at once; an apprentice brings more besides. Tradespeople who have made that leap, or decided against it, are well placed to tell the Committee why.
Research commercialisation sits at the other end of the spectrum. The Committee will also ask how the Department for Business, Innovation, Science and Trade will use its wider remit to support new firms. The department took on science and innovation when the Department for Science, Innovation and Technology was abolished in July. The Budget added £25 million for UKRI Venture Doctorates and up to £16 million of proof-of-concept funding to help researchers take ideas towards spinouts. With business and innovation policy under one roof, there is a chance to treat the route from laboratory to company as a single journey rather than a handover between departments.
The headline numbers suggest Britain has no shortage of people willing to start a business. The harder questions are whether everyone gets a fair shot, and whether those who start can build something that lasts. Founders are better placed than anyone to answer them.
Have your say by 12 November
The Committee welcomes evidence from anyone with answers to its questions, and there is no need to tackle them all: a short submission grounded in direct experience can be more useful than a long one. The call for evidence covers six themes:
the UK’s entrepreneurial environment, including tradespeople growing from sole trader to employer
international comparisons
education, culture and access to entrepreneurship
innovation and commercialisation
access to finance
place-based entrepreneurship and local growth
Submissions close at 11pm on Thursday 12 November. The full call for evidence, with a link to submit, is here. Transcripts of last week’s three panels, which also heard from the British Business Bank, investors, market traders, convenience stores and tradespeople, are on the Committee’s website.
Advisory Board Update
Latest news, research and events from our Advisory Board
The Enterprise Research Centre (ERC) has a small number of spaces left for the 2026 ERC-DBIST Longitudinal Small Business Survey Dissemination Event on 18 November at The Shard in London (10am–2pm). The event will share key findings from the 2025 LSBS panel survey, reflect on 11 years of LSBS data and bring together academics, policymakers and practitioners to explore evidence-based ways to support SME growth and productivity.
London & Partners are highlighting Scale UK Connect, a new 12-month DBIST pilot programme that aims to support 200 high-growth businesses across the UK with expert advice, investor and corporate connections, and opportunities to expand internationally. You can read more in the DBIST press release and on London & Partners’ LinkedIn.
The Campaign for Science and Engineering (CaSE) has published its analysis of what the 2026 Budget means for R&D.
The EIS Association (EISA) is hosting a series of events this month: Ready, Steady, Grow networking events in Cardiff (5 November, Blake Morgan), Manchester (10 November, Cooper Parry) and Newcastle (26 November, Grainger Hub), all 4–7pm, as well as its Autumn Forum at Shoosmiths in London on 11 November (4–8pm).
The ERC has also published several new reports:
Global Entrepreneurship Monitor’s Beyond the Unicorns: Everyday Ambition, Uneven Support;
Universities and local economic development – a review of academic literature;
UK Business Creation Process for Ethnic Minorities: Panel Study of Entrepreneurial Dynamics 2023-25; and
In Parliament
Questions and comments relating to entrepreneurship this month
Our former Chair Seema Malhotra MP welcomed the support for young and women entrepreneurs:
“I was extremely pleased to see the measures supporting young entrepreneurs and also women entrepreneurs. I championed that in my previous work as chair of the APPG for entrepreneurship. Entrepreneurship is oddly absent from debates about youth unemployment. We celebrate success when people have an initial public offering or attract a big investment, but we do not talk about the preceding journey or the inequality that often characterises it.”
Our Officer Callum Anderson MP backed the new founders’ relief:
“With all the blood, sweat and tears that go into building a business, we need to give founders a genuine, compelling reason beyond patriotism alone to remain anchored here and to stay here. That is why the founders’ relief is so welcome. I know that many business groups have been arguing and advocating for it across Government and Westminster for some time. We are giving entrepreneurs greater confidence that they can build and scale here and that they will be rewarded.”
Liam Byrne MP, Chair of the Business, Innovation, Science and Trade Committee and a former Chair of the APPG, warned that too few new businesses survive:
“We have doubled the entrepreneurship rate since 1999, but too few of those businesses are surviving for the long term because we are not investing in ourselves. Let us rebuild regional banking, let us put business banking back on the high street and let us couple that with stronger, sharper incentives for our angel investors and venture capitalists. We are making some progress, but it needs to be much faster. We are not short of long-term savings or of genius, but what we have got to do is match the money to the ideas and the entrepreneurs at a completely different scale for the years to come.”
Former Business and Trade Secretary Peter Kyle MP called for scale-ups backed by the British Business Bank to get better access to government:
“We went through a period, with my encouragement, of taking equity stakes in scale-up companies as part of our scale-up plan. There was all the due diligence that goes into making those decisions and which lead to the British Business Bank, through the independent and thorough work of its investment committee, taking an equity stake. Yet once that is done, there is no preferential access to any other part of Government. That should change.”
Kit Malthouse MP argued that founders’ relief shifts value away from smaller businesses:
“If he looks at the founders’ relief in the scorecard and puts it against the reduction in business asset disposal relief, he will see that effectively there has been a straight transfer of value from family businesses, high street shops and smaller businesses to the tech bros who are going to benefit from founders’ relief.
The rise in taxation on dividends, the rises in capital gains tax, the reduction in any kind of relief for entrepreneurs, and the complexity of the enterprise investment scheme and the seed enterprise investment scheme—all that is a massive deterrent to anybody who wants to start a business and take a risk.”
Sir Ashley Fox MP questioned the need for a new relief:
“Do we really need a new founders’ relief from capital gains tax? We are told that it will be for “qualifying founders of high-growth, innovative companies”. That perhaps sounds good for a Labour tax relief, but would it not be better to lower the rate of CGT for everyone, rather than add another carve-out for accountants and lawyers to argue about?”
Gurinder Singh Josan MP urged the Government to restore Venture Capital Trust relief:
“I would have liked to see the restoration of the 30% up-front income tax relief for venture capital trusts, which was reduced to 20% at the last Budget, as that relief is vital in supporting British small and medium-sized enterprises in their early stages of development.
At last year’s Budget, the relief was reduced further from 30% to 20%, and as a result, industry estimates suggest a decline in fundraising of anywhere between 30% and 60%, which is equivalent to between £1.25 billion and £2.5 billion less growth equity for UK scale-ups over the next five years.”
Looking Forward
Consultations and calls for evidence from government departments and Select Committees
Business, Innovation, Science and Trade Committee — Entrepreneurship and business (Deadline: 12 November 2026)
Business, Innovation, Science and Trade Committee — UK export support services (Deadline: 13 November 2026)
Department for Work and Pensions — Small Pots: a pathway for consolidation (Deadline: 17 November 2026)
HM Treasury — Corporate Tax Simplification for Business Investment (Deadline: 21 November 2026)
HM Treasury — Founders’ Relief: technical consultation (Deadline: 30 November 2026)
Department for Business, Innovation, Science and Trade — Modernising corporate reporting (Deadline: 30 November 2026)
Department for Business, Innovation, Science and Trade — Make Work Pay: revised code of practice on dismissal and re-engagement (Deadline: 17 December 2026)
Department for Business, Innovation, Science and Trade — Make Work Pay: employment status reform and protections for the self-employed (Deadline: 8 January 2027)
HM Revenue & Customs — Modernising Corporation Tax administration (Deadline: 20 January 2027)
HM Revenue & Customs — E-invoicing digital reporting (Deadline: 20 January 2027)
