Almost three-quarters of scale-up founders have no confidence that the Chancellor’s Budget will be good for business, with fears of higher taxes on capital and wealth threatening to undermine Labour’s growth ambitions.
Chancellor John Healey faces a growing crisis of confidence among Britain’s entrepreneurs, with new research showing that just 4 per cent of surveyed business founders are fairly confident his forthcoming Budget will support business — and not a single respondent is “very confident”.
The findings, published by Helm, a community of scale-up founders whose members run businesses with combined revenues exceeding £8bn, expose the tension between Labour’s promise to drive economic growth and mounting anxiety over the prospect of further tax increases.
Of the 400 founders surveyed, 73 per cent said they were “not at all confident” the Budget would be good for business, while another 23 per cent were “not very confident”. The poll comes ahead of the Chancellor’s planned Budget on October 28, amid speculation over potential taxes on capital gains, wealth and personal assets.
The strongest concern was the prospect of a tax on capital or assets, identified by 88 per cent of respondents as the change they most feared. More than half — 57 per cent — pointed to a further increase in capital gains tax or its alignment with income tax rates, while 31 per cent cited a wealth tax on personal assets or property.
Founders also called for relief from employment costs. Some 35 per cent said Healey should reverse increases in employers’ National Insurance contributions, while 27 per cent wanted a commitment to no further business tax rises during the remainder of the Parliament.
Only 11 per cent selected reducing the cost of employment regulation as their preferred measure to stimulate growth.
The figures present a challenge for a Chancellor who has made economic expansion a central test of Labour’s credibility. Speaking at the party conference in Liverpool last month, Healey said he wanted government decisions to bring “new levels of confidence, investment and yes, profits in British business”.
Andreas Adamides, Helm’s chief executive, warned that persistent speculation over tax changes was making it harder for entrepreneurs to plan.
“Founders need certainty to plan ahead,” he said, arguing that continued tax increases risked driving entrepreneurs to build businesses elsewhere.
Gareth Broekmann, founder and managing director of Charles Square, said uncertainty itself had become a brake on hiring.
“I can make a hiring decision on a bad rule. I cannot make one when the rule might change at the next Budget,” he said.
Fiona Hudson-Kelly, executive chair of BPIF Training, urged the Chancellor to “stop taxing the easy targets like small businesses that are trying to grow”.
Helm’s findings do not establish how the wider business community feels, but they deliver a pointed warning from a group central to the Government’s growth ambitions: if entrepreneurs believe investment will be punished by an unpredictable tax regime, Labour’s promise of stronger growth may prove harder to deliver.
Leave a Comment