Here’s a low-cost plan to stop young entrepreneurs leaving Britain
Rachel Reeves is looking for growth on a tight budget. She must focus on creating the conditions that help Britain’s young founders start, survive and scale, while also addressing the root causes driving Britain’s entrepreneur exodus, argues Sean Kohli
Rachel Reeves will be getting no shortage of advice ahead of November’s Budget. The snowballing fiscal black hole has no doubt sucked into its vacuum a more than sufficient proportion of the Treasury’s time.
But buried in all the noise lies a genuine opportunity to make tangible change: change that aligns with the Chancellor’s mission of growth and points to the future rather than the next fiscal sticking plaster. If Reeves really wants to boost Britain’s economic dynamism, she should start with the people already driving it: our young entrepreneurs.
In recent months, through the Young Entrepreneurs Forum, I’ve spoken with hundreds of this country’s most promising young founders. Their verdict, presented in our Ambition Unlimited report, is strikingly consistent: Britain is a great place to start a business – but a hard place to grow one.
Britain has all the raw ingredients: world-class universities, creative talent, and strong early-stage investment. But scaling up businesses remains a slog. Inflation has eroded the value of key tax incentives. Raising follow-on capital is far harder than it should be. Regulation lags behind innovation. Visa rules are tightening just as every major economy is competing for the same talent. And the tax burden on those who take risks has crept ever higher.
The result is what can only be described as an entrepreneur exodus. A recent poll of business owners found that nearly four in ten are considering relocating overseas because of rising taxes and red tape. Separate research by Henley & Partners estimates the UK will lose a net 16,500 millionaires this year alone, while the Adam Smith Institute warns that by 2028, one in five of Britain’s wealth creators could be gone.
Brain drain
This isn’t just a brain drain, it’s a signal that the system itself is pushing enterprise away.
If the Chancellor is serious about turning this into the Budget that reignites growth, here’s where she should start: practical, low-cost reforms that would deliver big results and stop this flow of talent out of the country.
The Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) are two of Britain’s biggest success stories.They’re tax reliefs that have powered a generation of startups. But their limits haven’t kept pace with inflation or the realities of modern business. Update them, simplify the rules, and extend their certainty beyond 2035.
The Chancellor should also finish the job started by the Mansion House Reforms. Pension funds and big institutions should be encouraged, or required, to invest more of their capital in British scale-ups instead of passive global portfolios. Even a small shift could transform the UK’s growth landscape overnight.
Another simple step would be to scrap Stamp Duty on shares. Britain is one of the few advanced economies that still taxes share purchases, a 0.5 per cent levy raising around £3bn a year. That’s small change in the context of public spending, but a big drag on investment. Abolishing it would make listing in the UK more attractive, cut the cost of capital, and deepen the pool of investors backing British firms.
Every major economy is competing for the same talent: scientists, engineers, developers, founders. Britain can’t win that race with higher visa costs and constant U-turns on immigration policy. Prioritise the best: keep the Graduate Visa in place, streamline the process, and let founders use equity to meet salary thresholds when hiring from abroad. In early-stage startups, equity is pay.
Tinkering
Constant tinkering with Capital Gains Tax and Business Asset Disposal Relief drains confidence. Entrepreneurs don’t expect handouts, but they do expect stability. Commit to competitive, consistent rates for the rest of the Parliament and restore meaningful relief for those who’ve built and sold businesses. Nothing would signal belief in enterprise more clearly than tax certainty.
Our universities are global research powerhouses, but too few discoveries become businesses. A “Professor’s Privilege” model, like those in Sweden and Norway, would give academics ownership of their own IP and incentives to commercialise it. With the right framework, our campuses could become engines of growth rather than vaults of unused innovation.
And finally: measure results, not forms. Public programmes remain fragmented, bureaucratic and obsessed with process over outcomes. Tie funding to what matters – jobs created, exports grown, investment raised – not to how neatly someone can fill in an application.
Above all, Reeves should remember that culture follows policy. Britain still talks about being a “science and tech superpower,” but it doesn’t yet behave like one. Entrepreneurs see when governments reward risk-taking and when they punish it.
Elsewhere, the competition isn’t waiting. France has slashed taxes and opened visas for global talent. The US keeps doubling down on innovation. Even smaller nations like Sweden and Singapore have realised that consistency and openness matter more than slogans.
Britain doesn’t have a talent problem; it has an environment problem. We educate brilliant people and attract world-class researchers but we make it too hard for them to build and stay.
Next month’s Budget is the Chancellor’s chance to change that. If she wants growth, she needs to back the people who actually create it. The entrepreneurs are ready to build. The only question is whether the government will finally give them the tools to grow.
Sean Kohli is chair of the Young Entrepreneurs Forum, part of The Entrepreneurs Network