Over the last 15 years, I’ve had the privilege of witnessing London’s vibrant business ecosystem firsthand. Working in finance, I’ve walked through the doors of countless small and medium-sized enterprises (SMEs) that power the UK economy and shape its culture. For many business owners, their enterprise is far more than a money-making venture—it is their life’s passion.
I recall an encounter with a shop owner in London’s West End. Specialising in miniature portraits, this gentleman, in his 80s, sought funding to expand his business. Despite his age, retirement wasn’t an option. His soul was entwined with his craft, his clientele, and his legacy. His shop was more than a business; it was an extension of his identity, a testament to the art and history he cherished.
From financing London’s oldest restaurants to iconic theatres and boutique hotels, my experience taught me that SMEs are not only the lifeblood of cities, providing jobs, services and driving economic output, but also part of their soul, bringing creativity, diversity, and community to our streets.
Business owners embody resilience, overcoming challenges to not just survive but thrive. Their stories reflect the ambition, perseverance, and innovation that define entrepreneurial spirit. Wealth creation through business is often built on sacrifices and personal responsibility—employing staff, weathering economic challenges, and sometimes forgoing personal income to stay afloat. These efforts deserve celebration, not penalties.
That’s why I oppose the measures imposed by Rachel Reeves: the National Insurance increase on businesses, which burdens employers with additional costs and hinders job creation, and the changes to Business and Agriculture Property Reliefs, which threaten the viability of family-run firms. These policies signal one thing: the government doesn’t understand the modus operandi of business. If politicians kick business, you can be sure it will kick back, harder.
I was reminded of this as I raised my glass with a French business client, who had just closed an acquisition to expand his company and employ more staff with our financing support. He spoke with pride about his business, like a parent talking about their child. As we marked the milestone, I asked why he set up his business in the UK. “In France, the government is too involved in business,” he said, highlighting a key issue: government interference and punitive measures stifle growth and discourage entrepreneurship.
Given Reeves’ focus on punitive measures for businesses, Conservatives can strengthen our pro-business stance by prioritising high-growth industries as key drivers of economic growth. Specifically, businesses that rely on intellectual property (IP) are critical to the UK’s prosperity. While they represent only 0.5% of UK businesses, they contribute a substantial 58% of the output from UK SMEs, which totals £1.3 trillion. Their success stems from their use of patents, trademarks, copyrights, and proprietary technologies. By supporting IP-driven sectors such as creative industries, life sciences, and tech, we can stimulate wealth and economic growth.
Yet these businesses, especially in their early stages, face a critical challenge: securing investment. Not yet achieving recurring revenue, profitability, and strong cash flow, many rely on business angels, private investors, crowdfunding, and venture firms to fuel their growth. These sources remain essential for scaling businesses, but we need to unlock more avenues of investment to support them.
A large amount of capital remains tied up in private wealth, presenting a significant opportunity to encourage reinvestment into British business. For high-net-worth individuals (HNWI), the options are clear: tax them and risk driving them abroad, as we’ve seen with the recent exodus of millionaires, leading to Rachel Reeves making concessions on her ideological beliefs to try to curb the outflow. Alternatively, it’s far better to incentivise them to stay and reinvest their wealth.
It’s true, it’s not always easy to get money out of HNWI—I once met a centi-millionaire who frugally reused tea bags—but they are likely to invest in good opportunities when the right incentives are in place. Here are some ideas of how we can unlock this potential.
The Enterprise Investment Scheme (EIS) supports fast-growing companies by offering private investors tax incentives, including up to 30% income tax relief, capital gains tax exemptions, loss relief, and potential inheritance tax relief. This scheme has unlocked billions in capital, fostering innovation, job creation, and technological advancement. However, the EIS needs updating to continue supporting innovative firms effectively. At a recent Women in Tech Policy event, entrepreneurs highlighted the challenge of EIS time limits; with market conditions becoming tougher, scaling businesses need more time to grow. The Scale Up Institute supports extending the seven-year cap to fifteen years, ensuring better access to follow-on funding.
Over dinner with an investor, we discussed the need for more venture debt to support growth businesses. While venture capital is a key funding source, venture debt offers a valuable non-dilutive alternative that’s often cheaper for scaling businesses than giving away equity. We should consider an Enterprise Venture Debt Scheme, offering personal tax incentives like the EIS, to encourage private investors to provide debt financing. Setting a flat rate income tax of 15% on interest income earned, offers the HMRC an income, and an attractive tax rate to investors. This scheme would give high-growth firms an alternative source of funding without diluting ownership. To mitigate the risk of over-leveraging, debt could be capped at a reasonable ratio, such as 20-30% of equity, with safeguards like convertible warrants, which allow debt to convert into equity if repayments aren’t made. This would help balance risk and reward for both investors and entrepreneurs.
Business owners understand growth because they’ve lived it. A zero capital gains tax policy on profits from the sale of business assets, if reinvested into British businesses, would incentivise them to reinvest their wealth into the UK economy. In Texas, the absence of state-level capital gains tax has fostered a pro-business environment. The UK’s proposed policy would build on this by specifically targeting reinvested sale profits, encouraging further investment in businesses.
To truly support the UK’s entrepreneurs, we must return to a mindset that sees businesses as creations to be nurtured, not cash cows to be taxed. We must be the party that backs business—celebrating their wealth creation, understanding their challenges, and empowering their future growth by increasing incentives to invest in our high-growth British businesses.
