UK Business Leaders Press Chancellor for Founder-Friendly Budget

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

The reported relief would arrive as military spending rises and private capital continues to flow into companies developing software, autonomous systems and other dual-use technologies. The prospect of targeted support for one sector has sharpened a wider debate about how the government should approach growth, investment and productivity across the whole economy.

What would defence-tech tax relief actually do?

Daniel Turgel, Partner and Co-Head of White & Case's Global Technology Industry Group, framed the measure as a competition for capital and talent rather than a narrow fiscal tweak.

"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," Turgel said. "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."

The subtext is competitive: policymakers in Britain and elsewhere have been pressured to keep fast-growing technology companies onshore as they expand. Tax relief alone does not guarantee that companies stay, but it removes one reason for them to leave.

Can the Budget make growth affordable?

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.

Theo Wasserberg, Managing Director, UK and Ireland, at Embat, tied the cost debate to productivity and artificial intelligence.

"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," Wasserberg said. "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."

Embat's survey of European finance executives found that almost half expect their teams to see gains of up to five hours each week from AI — roughly a seventh of a standard working week per person, and a figure Wasserberg said 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," Wasserberg said.

That claim carries a caveat: expected time savings are not yet measured output gains. Companies expect automation to deliver savings in finance and back-office functions, but the survey records anticipation, not results.

What do founders themselves want?

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

Tarek Nseir, Co-Founder and Senior Value Partner at Valliance, set out the agenda in direct terms.

"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," Nseir said. "However advanced technology becomes, talented people still determine how quickly great ideas turn into successful businesses."

On funding, Nseir pressed for improved access to finance for early-stage and scaling companies, and for R&D grants and funding that is easier to find and apply for, "so that promising ideas are not lost to paperwork or capital shortages."

He was bluntest on tax. "Increasing capital gains tax sends the wrong message to founders: that their success will be penalised," Nseir said. Reports that the Chancellor is steering away from a major hike are welcome, he added, and the Budget now needs to build on that.

Nseir closed with a longer horizon: stronger incentives for skills, training and early-career support would help ensure the UK has the people to keep its start-ups growing for years to come.

The bigger picture

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. Whether the Chancellor delivers on any of the three fronts will determine whether the sector's enthusiasm survives the Budget itself.