Only 3% of British founders believe that the UK Government understands the needs of entrepreneurs, leading a fifth to consider leaving the country to scale their businesses, according to a new survey from The Entrepreneurs Network.

Polling more than 270 UK founders last month, the latest Entrepreneurs Survey undercuts the government’s position as a champion of business growth, with just 4% of respondents trusting Labour to grasp the realities founders face, compared to 31% for the Conservatives and 8% for Reform.

The vast majority of founders (86%) agreed that Keir Starmer’s government shows little understanding of what entrepreneurs need, with 89% having a negative view of the current tax framework and 73% pessimistic about the level of business regulation in the UK.

Those figures come despite Labour having made it an early mission to “kickstart economic growth” by cutting red tape and simplifying policy, an ambition which has seen sweeping reforms for institutions like the FCA and Companies House and the launch of a Regulatory Innovation Office for the country’s fastest-growing sectors.    

But though the government is aiming high, most recently with the pledge to cut the administrative costs of regulation for business by a quarter, the Entrepreneur’s Network found that just 22% of founders think the UK is incentivising new business creation, while 68% think that current policies are causing good ideas and opportunities to wither.

According to the study, British founders agree that it has become more difficult to raise investment (76%), hire new staff (63%), and pursue innovation (55%), challenges that risk stagnating business growth, with 67% of entrepreneurs saying the UK is a difficult place to scale.

This pessimism is having an impact on future plans, with 21% of founders considering leaving the UK for distant shores, a figure fast catching up with the number planning to establish new offices or branches in the country (28%).

If founders begin to self-exile, the UK risks losing out on momentum for further growth, with 72% of respondents saying that, were the government’s policies around business relief changed, they would invest in other startups.

However, though a growing number of British entrepreneurs are threatening to leave the country, the vast majority are happy to admit that the government’s tax incentives and early-stage relief have been vital.

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Without the Seed Enterprise Investment Scheme, which offers tax benefits to investors in return for investment in startups, 84% of founders said it would have been difficult to raise cash for their firm.

Likewise, 86% of UK entrepreneurs credited the Enterprise Investment Scheme and 72% Venture Capital Trusts with their success in raising initial investment and helping them scale. More than half agreed that these three schemes provided more than just capital, giving access to expertise, networks and follow-on support.

Notably, the majority of founders who have used SEIS, EIS or VCTs agreed that these schemes play an important role in keeping high-growth firms headquartered in the UK, evidence perhaps that the government are focused on the wrong aspects of growth and should instead focus on providing more support.