UK Start-up Companies

Lord Londesborough Excerpts

Wednesday 28th January 2026 Lords Chamber

Asked by

[Lord Londesborough]

To ask His Majesty’s Government what assessment they have made of the recent performance of startup companies in the United Kingdom.

[Lord Londesborough (CB)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and declare my interests as an adviser and investor in start-ups.

[The Parliamentary Under-Secretary of State, Department for Business and Trade and Department for Science, Innovation and Technology (Baroness Lloyd of Effra) (Lab)]

My Lords, the latest ONS figures highlight the continued resilience of UK entrepreneurship. One-year survival rates have also remained strong, holding at over 93% in recent years. Furthermore, the percentage of adults starting or running a new business in the UK in 2024 was 14%, as opposed to 12% in 2023, remaining above France, Germany and Italy. This underscores the ability of new British firms to establish themselves successfully.

[Lord Londesborough (CB)]

I thank the Minister for her response, but I think it is fair to say that key data on our start-ups is missing in action. Since the enterprise investment scheme was introduced 30 years ago, I have calculated that £40 billion has been invested in EIS start-ups, triggering £12 billion in tax credits. I declare an interest in that I am a beneficiary. And yet what has been the economic impact? What is a true success rate of these start-ups? How many permanent jobs have been created and sustained? What is their net contribution to GDP? And what is the return on investment of that £12 billion from the public purse? If the Minister is unable to answer these questions, can I suggest that her colleagues at the Department for Business and Trade knock heads with the ONS so that they can produce this data?

[Baroness Lloyd of Effra (Lab)]

The evidence from HMRC’s 2022 evaluation shows that 75% of enterprise investment scheme companies strongly agreed that finance led their company to grow. As the noble Lord is aware, in the Budget the Government introduced an entrepreneurship tax package to support innovative young companies, doubling the eligibility of the EIS. At the same time, the Treasury is running a call for evidence to gather evidence on how well existing support is working, including the EIS, and on options for further support. The questions that the noble Lord asked will be addressed, at least in part, by the consultation that the Treasury is launching now.