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We recently sought the views of chief executives and founders from across our 400-company investment portfolio, ahead of the new Government’s first Budget in October.*
Headline stats from the pulse survey included:
- The vast majority (88%) of CEOs and founders believe that a review of Capital Gains Tax — which is expected to see the levy raised — demonstrates a lack of support for entrepreneurs, with close to three quarters (74%) concerned that such a move will have a negative impact on their business.
- 78% of CEOs and founders said a higher rate of Capital Gains Tax would influence their decisions on whether to invest further into their businesses, limiting job creation and economic growth.
- A potential overhaul of employment rights found that 62% of respondents expect the changes to be damaging to their businesses, with 71% saying they felt the Government’s approach to employment rights may not be sufficiently balanced between meeting the needs of both staff and employers, with SMEs being especially vulnerable.
- When asked about their general level of confidence in the prospects for their business, compared with six months ago, 29% felt more optimistic, 31% felt the same, and 40% felt less optimistic.
Labour’s manifesto highlighted that creating an environment of sustained economic growth was critical to improving the UK’s prosperity, making it a priority should the party win the election. Commentary from business leaders accompanying BGF’s research, however, revealed a degree of uncertainty about the Government’s ability to deliver on this.
Specific comments included:
- “The mood music over promoting growth is good, but very much undermined by proposed policies.”
- “It’s anti-entrepreneurial and will mean investment will go elsewhere.”
- “We need stability to drive growth; otherwise, we can’t plan effectively for the long term.”
- “We need a low tax, low inflation, low interest rates, flexible working practices, and less red tape, creating an environment that encourages growth. That will ultimately increase tax revenue and employee remuneration.”
- “SMEs are often much more disadvantaged by policy changes than the Government acknowledges. If the UK government wants to drive innovation to solve problems, the needs of SMEs must be actively considered.”
Commenting on the findings, Andy Gregory, CEO of BGF, said: “What we’re hearing of is an uncertain environment that business leaders are having to navigate while facing some very specific concerns that may or may not be contained in the Budget and could significantly impact growth prospects for SMEs.
“Listening to the concerns of small and medium-sized businesses is critical if the UK is to deliver on its growth ambitions, with SMEs accounting for just over half (£2.4 trillion) of UK private sector turnover and 61% of employment.”
*This data comprises responses from the 58 portfolio companies that participated in the BGF Pulse Survey in September 2024, across all sectors and all regions in the UK.
