Why UK Business Growth Is Stalling -IMO

Is it any wonder UK business growth remains subdued?

Rupert Soames, head of the CBI, recently said politicians have a “shocking lack of understanding of business.”

From where I sit, that’s hard to argue with. Because despite the ambition to grow, many businesses are being held back—not by lack of ideas or intent, but by the environment they’re operating in.

Businesses Want to Grow. The System Works Against Them.

Across the businesses I work with, the story is consistent:

They want to, grow revenue, create jobs and, invest in new opportunities. But the practical barriers are rising. Take hiring. Policy often assumes that growth means adding permanent headcount.
In reality, that’s increasingly not the case.

The Shift in How Businesses Actually Scale

Modern businesses don’t scale with fixed cost first.

They scale with flexibility, fractional C-suite leaders, interim specialists, project-based teams, freelancers and contractors.

Why?

Because growth today is often driven by, innovation, change programmes, new market entry, and diversification. These require specific skills, at specific times—not permanent roles. Yet regulation and cost structures still favour a traditional employment model. That mismatch matters.

Investment Is Tight—and Getting Tighter

At the same time, access to capital is becoming more constrained.

We’re seeing:

• Fewer active angel investors
• More cautious VCs and family offices
• UK wealth flowing elsewhere

And attracting inward investment is increasingly difficult. Not because the UK lacks capability—but because it lacks perceived advantage. Political uncertainty, tax complexity, and regulatory pressure all play a role.

Taxation vs Growth: A Misalignment

Most business owners I speak to are not trying to avoid tax. They’re trying to earn enough to pay more of it.

Growth generates, employment, spending and tax

But continued increases in costs—particularly around National Insurance—reduce the capacity to invest and expand. Politicians just don’t understand.

The Investment Contradiction

There’s another issue we don’t talk about enough. Only a small proportion of UK pension capital is invested in UK businesses. Instead, capital flows into overseas markets, investors favour the US, and retail money tracks indices like the S&P 500

Meanwhile:

• The FTSE 100 and especially the FTSE 250 struggle to attract investment
• UK equities remain relatively undervalued
• Domestic growth businesses lack backing

If we are not backing our own companies, why would others?

The Risk We’re Creating

This all leads to a bigger concern. If the UK is not seen as a competitive, supportive environment for business then investment leaves, talent follows and growth slows again. And once that cycle starts, it becomes difficult to reverse.

A Final Thought

I’m one voice—but it’s a concern I hear repeatedly.

Businesses are ready:

• To grow
• To employ
• To invest
• To contribute more to the economy

But they need the right conditions. Because growth doesn’t come from policy statements. It comes from businesses choosing to build, invest, and stay. Right now, too many are questioning whether the UK is the best place to do that.