Britain Must Become an Entrepreneurial Nation Again
Britain still has the foundations of a great business nation. Red tape, tax and fear of failure are wearing them away, and they can be won back.
In brief
- Britain still has the foundations of a great business nation, but red tape, tax and fear of failure are wearing them away.
- Founders need a lighter load at the start and a fair reward at the finish.
- Government should be the lightest regulator and the best customer a small business has.
Britain did not grow rich by playing safe. We grew rich because ordinary people were free to start something, risk their own money, fail if they had to and try again, with the state mostly staying out of their way. We have forgotten that bargain, and I know it because I walked away from it myself.
I left the UK and built my businesses elsewhere. I have now come back, and not out of nostalgia. I came back because I believe this country can be one of the best places on earth to build a company again, and because I would rather help fix the problem than describe it from a distance. Here is where I think it went wrong, and what I think we should do about it.
What we had, and why I left
Think about what a founder looks for in the great business centres of the world. A legal system that enforces a contract without favours. A common language that opens most of the world’s markets. Deep access to global finance in the City. A country people want to move to, so that the best talent comes to you rather than going elsewhere.
Britain had all of it, and still does. As recently as 2019 the World Bank ranked us eighth in the world for ease of doing business, and second in the G7 behind only the United States. We still start businesses too, with the Office for National Statistics counting 317,000 new ones in 2024. But starting a business is not the same as building one, and in my view the road from the first to the second has become steeper every year.
I did not leave Britain in anger. I left because building a business here felt like running with a rucksack that somebody kept filling with stones.
Abroad, in the Gulf and across Africa, I found a different attitude. People started things quickly, talked openly about what had gone wrong, and treated a failed venture as tuition rather than a stain. Governments there were far from perfect, but many of them wanted the investment and said so.
When I came home I expected the old confidence. What I found was a country that still admires entrepreneurs in speeches and makes life hard for them in practice. That gap between what we say and what we do is the real problem, and it is one we can close.
The weight we have added
Start with regulation. The government’s own figures put the annual administrative cost of regulation to business at £22.4 billion, and show firms spending 8.0 days a month dealing with it in 2024, up from 6.6 days in 2022. Ministers have promised to cut that burden by a quarter before the end of this Parliament, and the details are in the Regulation Action Plan progress update. By my own addition, the savings it itemises so far come to about £1.6 billion a year, and many are estimates rather than results. A promise is not a reform.
Then there is tax. Employer National Insurance rose from 13.8 per cent to 15 per cent in April 2025, and the point at which employers start paying it fell from £9,100 to £5,000. The Employment Allowance more than doubled to £10,500, which helps the very smallest firms, but every hire beyond that now costs more. At the other end, the rate under Business Asset Disposal Relief, which rewards people for building and selling a company, has gone from 10 per cent to 14 per cent and, since this April, 18 per cent. If you want people to take a decade of risk, you cannot keep trimming the prize.
A country afraid to fail
Money and paperwork are only half of it. The other half is nerve. In the 2024 survey by the Global Entrepreneurship Monitor, 58.2 per cent of Britons who were not in business but saw a good opportunity said fear of failure would stop them, up from 56.5 per cent the year before. Across all 51 economies in the survey, the comparable figure was 47 per cent.
Fear like that is learned. We learn it from a culture that gossips about the founder whose company folded and says nothing about the dozen who never began. In much of the world I have worked in, a person whose business failed is asked what he learned. Here he is too often written off.
What government should do
None of this needs a revolution. It needs a government that decides its job is to help people build things, and then acts like it. First, lighten the start. Give every new business a three year holiday from employer National Insurance on its first five hires, restore Business Asset Disposal Relief to 10 per cent, and let a founder register a company, tax and payroll in one online step on one day. Every pound and every hour not spent on forms in year one goes to a customer instead.
Second, be the best customer a small firm has. Departments have been set targets to direct more than £7.4 billion a year to small businesses by 2028, which is welcome, but targets are cheap. The test is whether a three person firm in Doncaster can bid for a contract without hiring a bid writer. Break big contracts into lots, drop the prequalification paperwork on smaller tenders, and pay every small supplier within 30 days, with late payers named in public.
Third, hold the government to its own promise. Put one minister in charge of the 25 per cent cut, publish the score every year, and adopt a simple rule that no new regulation goes on the books until two old ones come off. Fourth, make honest failure survivable. Tell the difference, in law and in public, between the founder who took a risk and lost and the one who cheated. Back the first with a quick second chance and pursue the second without mercy.
The lesson
Britain does not need to lecture its entrepreneurs about resilience. It needs to make starting easy, failing survivable and succeeding worthwhile. We still have the law, the language, the markets and the pull on the world’s talent. What we have lost is the will to get out of the way, and that can be won back. It is a task worth coming home for.
