What do founders really think of Labour?
The mood among Britain’s founder community has shifted, with 84 per cent now saying they don’t believe the Labour government understand their needs as entrepreneurs, says Eamonn Ives
Last week, the government announced that serial entrepreneur Alex Depledge would be joining the Treasury as Britain’s first-ever entrepreneurship adviser. New polling from The Entrepreneurs Network suggests that this appointment couldn’t come soon enough. Fully 84 per cent of founders we surveyed do not believe the government understands their needs as entrepreneurs, compared to just four per cent who do. If it’s any consolation to Rachel Reeves and Sir Keir Starmer, founders aren’t exactly wowed by any of Britain’s other political parties – 43 per cent replied ‘none of the above’ when given a choice of which party they trust most to know what they and the startups they lead require.
In recent months, the mood certainly seems to have changed within Britain’s founder community. Anecdotally, concerns about a growing tax burden, potential changes that would make hiring new employees more risky, and stricter immigration rules have dominated many entrepreneurs’ minds. Our survey confirms these worries with quantifiable data.
Nearly two thirds of entrepreneurs told us that it’s currently hard to recruit new staff, with over half citing high employment taxes like National Insurance Contributions as a factor behind this difficulty. Meanwhile, 84 per cent said they have a negative view of the level of taxation overall in the country, and 65 per cent said the same for the level of regulation their businesses face. Almost nine in 10 founders said immigration was important to Britain’s entrepreneurial ecosystem – including 59 per cent who said it was ‘very important’ – underscoring how damaging mooted changes to visas in the Immigration White Paper could be to Britain’s startup scene.
Altogether, one in six founders told us they expect to sell their business in the next 12 months – and more than one in 10 founders said they will up sticks from the country entirely. While the reasons for doing so varied, the overwhelming factor entrepreneurs blamed was crippling rates of tax, especially relative to other nations.
Founders remain optimistic
Our survey results weren’t all doom and gloom, however. By a considerable margin, founders are more optimistic than pessimistic about the year ahead for their businesses. Despite recruitment challenges, most still expect to increase headcount. A large chunk say they will increase R&D spending, and four in 10 are planning to raise fresh investment. Even though a large majority of founders said life as an entrepreneur has become harder since they started out, most would still encourage someone to have a stab at starting their own business.
We concluded our survey by asking founders what they’d tell the government if they had the opportunity. One responded saying they’d like to see “front bench Ministers with commercial experience”. Appointing an entrepreneurship adviser might not quite tick that box, but it’s certainly better than doing nothing. (And, to be sure, the government should be given credit for also bringing in the likes of Enterprise Nation founder Emma Jones as the new small business champion, Darktrace founder Poppy Gustafsson as the minister for investment, and Entrepreneurs First founder Matt Clifford as the Prime Minister’s AI adviser.)
If the economy was a diet, startups would be an essential micronutrient. By definition, they’ll never be a large segment of our business community, but they are a vital one – disproportionately creating new jobs, driving forward innovation, boosting productivity and staving off stagnation. With this in mind, the least policymakers can do is listen to what our nation’s wealth creators have to say. Unfortunately for the current government, our Entrepreneurs Survey shows Britain’s business founders are crying out for a change in direction.
Eamonn Ives is the Research Director of The Entrepreneurs Network. He is on X at @eamonnives. The full results of its Entrepreneurs Survey can be found here.