Small business owners have expressed their disbelief at a “tone-deaf” event held at No.10 Downing Street on Monday Night.
At the social, the Chancellor, in the company of some of ‘the UK’s top entrepreneurs’, celebrated a bold new plan to back homegrown founders and support high-growth scale-ups through the risky ‘Valley of Death’ stage.
One said: “While the Chancellor threw a party at No.10, business owners are doing the Budget maths and realising they’ve been mugged. Again.”
Another added: “Calling this a rescue from the Valley of Death is cute, as most small businesses are still crawling through it on their knees.” A third opined: “Does Reeves think canapés with handpicked businesses will revive a moribund economy?”
At the event, the Treasury trumpeted, founders, investors and innovators from across the UK — including meal-in-a-bottle firm Huel, savings app Moneybox and crime-busting tech company Quantexa — heard the Chancellor’s message loud and clear: economic growth is the government’s number one mission, and Britain’s entrepreneurs will be central to delivering it.
A reminder
The reception, the official announcement felt it necessary to remind us, followed the Budget, which the government claims delivered the most ambitious package for scale-ups in more than a decade: sweeping reforms to tax incentives so firms can attract world-class talent and investment, billions in long-term backing for science and technology firms, and changes to public procurement so taxpayer money is used to drive innovation.
Chancellor of the Exchequer, Rachel Reeves, said: “This government backs our entrepreneurs. That’s why we’re overhauling the rulebook – modernising tax incentives, unlocking billions in investment and making it easier for founders to hire, build and grow. Because when British businesses thrive, so does our economy.”
Business owners, still reeling from the Budget and the National Insurance hike in April, mocked the government’s claim that it has launched ‘an in-depth conversation with founders and investors about how the tax system supports entrepreneurs, ensuring it rewards people who take risks, reinvest in their businesses and create jobs’.
They were also staggered by claims the British Business Banks will invest £5 billion in growing companies, crowding in billions more private capital and supporting firms through the risky ‘Valley of Death’ stage so they can scale, hire and export from British soil — because countless entrepreneurs are leaving, or considering leaving, the UK to escape that selfsame soil.
Simply not true
Jill Poet, CEO at the Organisation for Responsible Businesses, said the government claiming it is backing entrepreneurs simply isn’t true.
She said: “This bells and whistles announcement is aimed only at high-growth scale-ups. Someone ought to remind Rachel Reeves and her government what the definition of an entrepreneur is. In simple terms, anyone who takes the risk of setting up their own business where they would be bearing most of the risks and enjoying most of the rewards, if they are any.
“Currently, 75% of private businesses in the UK have no employees. That is over 4 million businesses. Another million+ private businesses in the UK, a further 20%, have 1 to 9 employees. Yes. That is correct. 95% of businesses in the UK, according to the Government’s own figures, are tiny.
“Some of them will prove to be high-growth, but only a small percentage. Yet these tiny businesses deliver 20% of UK turnover. What support has this government offered these tiny, yet mighty, businesses? None whatsoever. Perhaps Rachel needs a lesson on entrepreneurship.”
Hollow claim
Matthew Knight, Chief Freelance Officer at The Independency Co., said the Chancellor cannot justifiably claim to be supporting entrepreneurs.
He said: “The Chancellor saying she’s backing Britain’s entrepreneurs while simultaneously stripping away the tax provisions that help small businesses survive is contradictory.
“If the government’s industrial strategy genuinely relies on homegrown entrepreneurs to drive growth, policy needs to match the promise.
“We need a landscape that reduces risk and helps new and small businesses avoid tax traps and heavier administrative burdens. And one that offers support regardless of business type — not only those that export, employ or are already looking to scale.
“Most importantly, it must recognise the risks entrepreneurs take on, rather than taxing them as if they were employees.
“Support for scale-ups is welcome, but creating a supportive environment for the self-employed, start-ups and micro businesses is essential if we want more businesses to grow in the first place.”
In Doncaster, the blood of Dariusz Karpowicz, Director at Albion Financial Advice, a mortgage broker, boiled: “Throwing a party at No.10 for handpicked scale-ups while most of the UK’s 5.5 million small businesses are working out how to absorb rising NICs, minimum wage hikes and new employment rules feels a tad tone-deaf.
“The real entrepreneurs, your local trades, small agencies and micro firms, do not need champagne receptions. They need lower taxes, less red tape and actual cash flow support.
“History shows governments are not great at picking winners, and this looks more like a photo opportunity than a serious plan for growth.”
Doing the maths
Colette Mason, Author & AI Consultant at London-based Clever Clogs AI, was apoplectic: “While the Chancellor threw a party at No.10, business owners are doing the Budget maths and realising they’ve been mugged. Again.
“Employer NICs are up. The National Minimum Wage is up. And if you’re a business owner paying yourself dividends, because that’s how small companies work, you’re hammered thrice.
“Once through higher employer costs, corporation tax, then again through dividend taxes treating your already-taxed profit like the government’s personal piggy bank.
“These billions go to companies with investor backing. The rest of us work out how to absorb cost rises without sacking people or folding.
“EMI scheme reforms? Lovely if you can afford to employ people. Growth Catalyst funding? Fantastic unless you’re one of 5.5 million SMEs who’ll never see a penny but will definitely pay for it.
“Back a few entrepreneurs and get some good press releases. Tax the rest into the ground.”
Kate Underwood, Founder at Southampton-based Kate Underwood HR and Training, was nonplussed: “Calling this a rescue from the ‘Valley of Death’ is cute, as most small businesses are still crawling through it on their knees. Honestly, it reads like someone in No. 10 has been sniffing the Christmas sherry early.
“This is a love note to glossy tech scale-ups, not the hairdresser, electrician or small agency trying to cover wage rises, holiday pay, sick leave and still pay themselves at the end of the month.”
More canapés, please
Tony Redondo, Founder at Newquay-based Cosmos Currency Exchange, observed: “Does Reeves think canapés with handpicked businesses will revive a moribund economy? The guest list hardly represents the typical British enterprise.”
Patricia McGirr, Founder at Burnley-based Repossession Rescue Network, also held no prisoners: “Death Valley for businesses didn’t appear out of nowhere. It was designed in Whitehall, priced in at the last Budget and handed to entrepreneurs as a seasonal gift.
“The government still can’t bring itself to class business owners as working people, yet now we get a party at No.10 to applaud a few scale-up stars and call it a revival of enterprise.
“Most firms don’t need a chandelier reception. They need a tax and funding system that doesn’t treat them as collateral. And in the spirit of Christmas, you can only assume the three wise men behind this spectacle were more focused on the photo opportunity than the fallout.
“For the rest of the business community, it feels less like policy and more like panto.”
Photo by Alexander Naglestad on Unsplash
