Britons are scared to start a business — help them, Reeves urged
- markmacgregor8
- Oct 24, 2024
- 2 min read
The Times | October 2024
British workers are increasingly hesitant to start their own businesses, reflecting a decline in entrepreneurial spirit, according to new data from the Onward think tank. The organisation characterises the UK as “unusually risk-averse” and urges Chancellor Rachel Reeves to address the high costs and bureaucratic hurdles stifling entrepreneurship. Despite Reeves’ commitment to create the “most pro-growth Treasury in history” and Sir Keir Starmer's focus on the economy, surveys reveal that Britain lags behind other countries in terms of willingness to launch new businesses. Fear of failure now deters 53% of working-age adults from entrepreneurship, a significant rise from previous years.
The report highlights that Britain’s fear of failure is 20% higher than the global median, largely due to concerns over financial loss and reputational damage. It notes that only five UK universities rank among the top 100 for producing successful entrepreneurs, compared to ten in California. Recent data indicates that the number of businesses in Britain has decreased by 425,000 since 2020, reversing a decade of growth, while self-employment has fallen by 734,000, particularly affecting sole traders and professionals. Tom Blomfield, co-founder of Monzo, comments on a pervasive pessimism that discourages young talent from pursuing entrepreneurial ventures in favour of stable jobs with prestigious companies.
Onward calls for reforms, such as new VAT thresholds and adjustments to IR35 self-employment rules, to improve access to loans for small businesses. Shivani Menon from Onward emphasises the need for growth-oriented businesses to combat the UK’s low productivity, advocating for measures that support diverse business growth. Shadow Business Secretary Kevin Hollinrake stresses the importance of facilitating business startups and growth, particularly by enhancing access to finance and reducing regulatory burdens. A government spokesperson noted the challenges of recent years and affirmed ongoing support for small businesses, including efforts to address late payments and create a fairer business rates system.
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