The Beating Heart of Britain: Why Only Reform UK Can Revive Our Business Economy

Business is not just the engine of our economy – it is the beating heart. Without thriving businesses, there is no prosperity, no public sector and no meaningful path to national renewal. Small and Medium-sized Enterprises (SMEs) represent 95% of all businesses in the UK and employ over 16.3 million people. These are not merely statistics – they represent the livelihoods, ideas and ambitions of real people whose risk-taking and innovation are the foundation of everything else.

And yet, it is extraordinary how often this truth is overlooked – not least by those who govern. In economic terms, business is the only wealth-generating entity in the system. Government, public services and welfare mechanisms can only exist if businesses succeed. Every pound spent by the state is made possible by the productivity and profitability of the private sector. When business is stifled, everyone suffers.

A Hostile Climate for Enterprise

Over the past 15 years, successive governments — Conservative, Labour and Liberal Democrat alike — have conspired, through mismanagement and misplaced priorities, to create one of the most punitive and hostile economic environments small and medium-sized enterprises (SMEs) have ever known.

In just 12 months, the Labour government has accelerated this decline with astonishing speed. Economic growth turned negative in May, inflation is once again on the rise at 3.6% and unemployment has climbed to 4.7%, with 110,000 fewer people on payroll than this time last year. Investor confidence is evaporating, the jobs market is in its worst slump in over four years, and over 16,500 millionaires have already left the country. And yet worse lies ahead: the looming Workers’ Rights Bill — opposed by 8 in 10 businesses — is expected to further throttle growth. Meanwhile, Labour is presiding over a staggering £100 billion increase in public spending, with borrowing and taxation now at levels unseen for decades. The national debt stands at over £2.7 trillion, with annual debt interest payments exceeding £100 billion — more than the entire defence budget.

But Labour did not inherit a strong hand. The rot set in under the Conservatives, who governed for 14 years with Liberal Democrat support during the Coalition years and beyond. Far from providing dynamic leadership, they presided over an era of managed decline, disguising stagnation as stability. Under Jeremy Hunt’s stewardship, the UK was saddled with the highest tax burden in 70 years. Despite years of free-market rhetoric, the Conservatives hollowed out their principles, becoming a risk-averse managerial class obsessed with focus groups and allergic to reform.

The Liberal Democrats, far from being innocent bystanders, enabled and endorsed these damaging policies throughout their time in government. Today, they present themselves as moderate progressives, yet their economic platform continues to favour higher taxes, increased red tape and a deference to EU-style bureaucracy that would only deepen the UK’s productivity crisis.

Corporation Tax now stands at 25% – a rate that leaves the UK uncompetitive in a world where capital flows freely. Ireland, by contrast, offers a 12.5% rate. Even smaller firms earning under £50,000 face a 19% tax burden, while those up to £250,000 are hit with an effective marginal rate of 26.5%. This is not a system that rewards effort or incentivises investment- it is one that punishes ambition and smothers innovation.

The VAT threshold has remained frozen at £85,000 since 2017, creating a ceiling on growth for small businesses. Once a firm crosses this line, it must start charging VAT – making its services less competitive overnight. Chancellor Hunt’s much-vaunted “full expensing” policy, intended to boost capital investment, offers little relief to SMEs already stretched by rising wages, supply chain inflation and diminishing margins. It is a policy designed by spreadsheet economists, not by people who understand the day-to-day realities of running a business.

A Missed Post-Brexit Opportunity

Post-Brexit Britain had the chance to position itself as a magnet for global capital and entrepreneurial talent. By becoming a low-tax, business-friendly environment, we could have revived the enterprise economy and funded public services from the resulting growth. Instead, the Conservative government squandered that opportunity, while Labour and the Liberal Democrats propose policies that would make conditions even worse.

This is not scaremongering – it is spelled out clearly in their manifestos: higher taxes, greater regulatory interference, and a growing hostility to those who dare to create wealth. Britain is stagnating, and our major parties have made a conscious decision to attack aspiration.

Reform UK: A New Deal for Business

Reform UK is the only pro-business party committed to reversing this decline. Our economic platform is designed not just to stop the rot, but to actively restore Britain’s entrepreneurial spirit. Here is how we will do it:

• Corporation Tax: We will raise the minimum profit threshold to £100,000 and reduce the main rate from 25% to 20%, then to 15% by year five.

• VAT Threshold: We will raise this to £150,000, easing the burden on sole traders and small companies – from plumbers to plasterers – and lowering consumer costs.

• IR35 Legislation: Reform will abolish the damaging off-payroll rules introduced by the Conservatives. Self-employed consultants and contractors must be able to work via limited companies to manage risk and maintain flexibility – not be punished for it.

• Brexit Red Tape: We will repeal thousands of EU-derived regulations still enshrined in UK law, covering everything from state aid to employment and environmental rules.

• Business Rates: We will abolish business rates for High Street SMEs and introduce a 4% online delivery tax on multinationals to level the playing field.

• Tax Simplification: The UK tax code has grown to 21,000 pages – Reform will overhaul it, making it simpler, clearer, and fairer.

• Windsor Framework: We will dispense with this agreement, which leaves Northern Ireland inside the EU single market for goods, limiting UK sovereignty and adding costs to internal trade.

Conclusion: Back to Growth, Back to Reality

The reality is stark. If we do not radically change course, the UK will fall further behind – economically, culturally, and competitively – over the next two decades. We cannot allow the aspirations of millions of business owners to be sacrificed on the altar of political complacency and fiscal mismanagement.

Reform UK is committed to putting business back at the centre of the national story – not just because it is good politics, but because it is a fundamental truth: without successful businesses, there is no future prosperity.

We will not apologise for supporting those who create jobs, take risks, and build value. We will stand with them – because the success of our entrepreneurs is the success of Britain itself.