UK business leaders urge Budget support for founders

UK business advisers and technology executives have urged the Chancellor to use the Budget to improve conditions for founders and investors. Their comments followed reports that the package could include tax breaks for venture capital backing defence-technology scale-ups.

The prospect of targeted relief for defence technology has sharpened a wider debate about how the government should approach growth, investment and productivity across the economy.

One proposal under discussion is support for investors in defence-tech businesses. It comes as military spending rises and private capital continues to flow into companies developing software, autonomous systems and other dual-use technologies.

"This would be a major fillip for one of the hottest and most strategically important sectors right now, as military expenditure soars and companies race to invest in and develop new technologies. With its ability to attract deep pools of capital, world-class defence and technology businesses, and strong management talent, the UK is a natural hub for defence technology investment. The challenge now is to capitalise on that momentum and ensure UK companies continue to have access to the right funding on the right terms in order to scale and compete globally," said Daniel Turgel, Partner and Co-Head of White & Case's Global Technology Industry Group.

Turgel's remarks place the reported tax measure in the context of competition for capital and talent. Policymakers in Britain and elsewhere have been pressured to keep fast-growing technology companies onshore as they expand.

Cost pressure

Other business figures said the Budget must address operating costs as well as investment incentives. They pointed to margin pressure from labour and energy bills, arguing that companies need greater confidence before committing to hiring and spending.

"For UK plc, this Budget needs to be about making growth affordable again. That means breathing room on costs, confidence to hire and invest, and a stable regulatory environment. While the UK economy has proven resilient this year, rising labour, energy and operating costs are squeezing margins. Businesses need practical measures to restore confidence, and AI could be key to achieving that. Our survey of European finance executives found that almost half expect their teams to see gains of up to five hours each week from AI. This equates to tangible productivity gains and could translate into meaningful economic growth. If the government wants businesses to embrace AI, it must take concrete steps to support the technology and facilitate investment," said Theo Wasserberg, Managing Director, UK and Ireland, Embat.

That view links the Budget debate to a broader push for productivity improvements. Artificial intelligence has become central to that discussion, particularly in finance and back-office functions, where companies expect time savings from automation and workflow tools.

Founder agenda

Start-up advisers also argued for changes that go beyond tax relief for a single sector. Their recommendations included labour mobility, access to funding, simpler grant systems and a cautious approach to capital gains tax.

"If the Chancellor wants Britain to remain one of the best places to build a company, this Budget should make it easier for ambitious people to start, scale and stay here. Reforming non-competes would be a positive step. However advanced technology becomes, talented people still determine how quickly great ideas turn into successful businesses. Giving them greater freedom to move, build teams and take ideas into new companies would strengthen the UK's start-up ecosystem.

"But freedom to build only matters if founders can fund what they build. The Budget should improve access to finance for early-stage and scaling companies, and make R&D grants and funding easier to find and apply for, so that promising ideas are not lost to paperwork or capital shortages. The same thinking should guide taxation. Increasing capital gains tax sends the wrong message to founders: that their success will be penalised. Reports that the Chancellor is steering away from a major hike are welcome, and the Budget now needs to build on that and give entrepreneurs the confidence to keep investing.

"Finally, the Chancellor should look to the long term. Stronger incentives for developing the next generation of talent through skills, training and early-career support would help ensure the UK has the people to keep its start-ups growing for years to come," said Tarek Nseir, Co-Founder and Senior Value Partner, Valliance.

Taken together, the comments show that expectations for the Budget extend well beyond headline tax decisions. Investors, scale-up advisers and finance executives are pressing for a mix of targeted incentives, lower cost pressures and clearer long-term policy on talent and investment.