Will Labour back businesses in the 2025 Autumn Budget?

As Chancellor Rachel Reeves prepares to deliver the Autumn Budget on 26 November, the question on many minds is whether Labour will finally make good on its promise to back British enterprise. With economic growth faltering and business confidence at a three-year low¹, pressure is mounting for Reeves and Prime Minister Keir Starmer to shift from rhetoric to action.

Labour’s relationship with business has been strained since its 2024 Autumn Budget, with a hike in employer National Insurance (NI) contributions adding substantial additional costs to businesses’ bottom line. Reeves has since attempted to repair ties, urging business leaders to ‘talk up’ the UK economy and warning that negativity could bolster Reform UK’s rise.

With little in the way of concrete changes to support growth, many in the business community remain understandably sceptical. Particularly given the fact that the government’s fiscal rules and manifesto pledges not to raise income tax, VAT or corporation tax have left Reeves with limited room to manoeuvre. With a substantial projected fiscal shortfall, the Chancellor faces a tough balancing act between fiscal discipline and growth stimulation.

The issues are magnified by an economic environment which is already challenging, with geopolitical factors in particular looming large over boardrooms from London to Los Angeles.

Speaking to us in a recent Autumn Budget preview webinar, former Chancellor George Osborne urged the government to embrace pro-enterprise measures, including considering an expansion of the Enterprise Investment Scheme (EIS). Osborne, who introduced the EIS during his tenure, argued that now is the time to re-establish the UK’s reputation as a hub for innovation and growth.

“There's a kind of mood at the moment that the UK is not a very enterprising place. I think quite a lot of the businesses, particularly here in the City of London, had sympathy for a new Labour government coming in, but I think they've lost that.

Reeves will be thinking of the positive things she can do that are going to get this economy moving, such investing the infrastructure, investing in the public services, and I wouldn't be surprised if there's some pro-enterprise things in the Budget.

You could definitely expand the EIS scheme now, and that's the kind of thing that creates a positive mood for businesses and the economy.”
His comments come amid growing calls from industry leaders for bold reforms to support scale-ups and attract capital.

The EIS and Venture Capital Trust (VCT) schemes remain vital tools for channeling investment into early-stage UK businesses. Both offer 30% income tax relief, with EIS allowing up to £2 million annually for investments in knowledge-intensive companies, and VCTs capped at £200,000. These are very illiquid, high-risk investments and investors can get back less than they put in, making tax benefits an important aspect in those choosing to commit capital to them.

Despite the attractive tax regime, the market for EISs and VCTs has cooled. HMRC data shows EIS investment fell 20% year-on-year to £1.6 billion, while VCTs dropped 17% to £873 million.² Investment managers attribute this to high interest rates and economic uncertainty, which have dampened appetite for higher-risk assets.

Still, there are bright spots. Seed Enterprise Investment Scheme (SEIS) investments rose 51%, suggesting that targeted reforms can yield results.²

Osborne offered a revealing insight into Budget strategy, explaining that while many of the supposed leaks coming out in the media at the moment will have little basis in truth, there are other clues that can help point to measure which could be announced.

“The government have set out things they won't do, so by process of elimination, you can consider, what’s left?”

This raises an intriguing possibility. While Reeves and Starmer have repeatedly spoken about backing British business, their first year in office has yet to deliver a flagship policy that aligns with that narrative. The 2024 Autumn Budget was marked more by regulatory tightening and tax freezes than by enterprise-friendly reform. With business confidence now at a multi-year low the pressure is on for Labour to show it can walk the pro-growth talk.

An expansion of the EIS or VCT regime would be a credible and impactful way to do just that. These schemes already have strong support from investment managers and financial planners, and Osborne’s public call for their expansion adds political weight to the idea. Such a move would not only signal support for scale-ups and innovation, but also offer Reeves a rare opportunity to deliver ‘unexpected good news’ that could shift the narrative and restore some lost confidence.

The challenge for business owners and investors alike is that this will remain speculation until Budget day. Reeves may elect to expand the existing structures for businesses to access capital, she may look to implement a completely different pro-business measure, or indeed she may not bring in any related changes at all. Whether she takes that opportunity remains to be seen, but entrepreneurs and business owners will be hoping that the silence around enterprise policy is more telling than it first appears.

Whatever the Autumn Budget delivers, our commitment to entrepreneurs and business owners remains unchanged. Whether the government introduces bold pro-business measures or opts for caution, we’ll continue to provide the guidance and resources you need to grow your business and achieve your personal financial goals. In times of uncertainty, having a clear strategy matters more than ever, and we’re here to help you build it.

Join us for our post-Budget webinar the day after the announcement, with analysis and guidance on how navigate the changes.

¹ CityAM, Tax fears drag business confidence to three-year low, 9 October 2025

² FTAdviser, ‘Disappointing but not surprising’ drop in VCT and EIS investment, 15 May 2025