Caudwell and Rose back Budget push

John Caudwell, the Phones 4u founder, and Lord Stuart Rose, the former chief executive of Marks and Spencer, have joined a campaign calling on the Chancellor to halt and reverse the creeping taxes that its signatories say punish founders for growing their businesses.

The two are the most prominent of a wave of new backers for Stop the Creep, run by the founder group Helm, which describes itself as the UK’s largest community of scale-up founders. They sign alongside Christos Angelides, chief executive of the fashion retailer Reiss, and Charlie Mullins, who founded Pimlico Plumbers. The campaign says more than 150 business leaders and parliamentarians have now added their names.

The signatories warn of a “death by a thousand cuts” for Britain’s wealth creators. Other backers include Luke Johnson, chair of Gail’s Bakery, Johnnie Boden, founder of the clothing retailer Boden, and dozens of politicians, among them the shadow business secretary Andrew Griffith.

What the campaign is asking for

Stop the Creep makes three demands. It wants the rise in Employers’ National Insurance reversed, the entrepreneurial reliefs that have been cut restored, and a clear, stable roadmap for business taxation set out so that founders can invest with confidence. The campaign’s published case argues that Britain risks becoming an incubator economy, world class at creating businesses but unable to keep them.

Employers’ National Insurance is the sharpest of those targets, and the one with the broadest reach beyond the founder class. Employer contributions are currently charged at 15 per cent on earnings above a secondary threshold of £5,000 a year. The measure has cost more than the Treasury expected: employer contributions in the year to the end of March came in around £4 billion above the official forecast, a £28 billion increase on the year before. When the rise was first announced, the British Chambers of Commerce found that 82 per cent of member firms would reconsider their plans because of it.

A retail veteran on the cost of hiring

Lord Rose, who also chaired Asda and is chairman of Zenith Vehicles, said: “I have been in Business for over 50 years and have never been more concerned about the cost of doing business and building businesses that are financially sustainable for the long term. Employment costs and regulations are now serious impediments to growth and employment.

“Employers’ National Insurance alone took a hundred million pounds a year out of one supermarket. Multiply that across the economy and it is easy to see why investment has stalled. The good news is that this is within the Government’s gift to fix.

“This is not about special treatment. If the Government wants businesses to create jobs and growth, the Budget is the moment to ease the burden on the act of creating them.”

Caudwell’s change of mind

Caudwell, who built Phones 4u before selling his business group for £1.5 billion, switched his support from the Conservatives to Labour at the 2024 general election. He has since said he was “misled” by the party’s pro-business promises. Over the weekend he told The Telegraph: “I do not think the Labour Party is electable”, adding that he would back any party that seeks to turbocharge growth.

Mullins sold Pimlico Plumbers in 2021 and has already left the UK for Spain over the rising tax burden, which is the point the campaign is making about direction of travel rather than about any one measure.

The Budget as the test

The intervention lands as attention turns to Chancellor John Healey’s first Budget on 28 October. Polling of business leaders published by Helm earlier this month found that just 6 per cent consider Prime Minister Andy Burnham to be pro-business, with more than four in five expecting trading conditions to stay the same or get worse.

Andreas Adamides, chief executive of Helm, said: “John Caudwell wanted this Government to succeed. Lord Rose has spent half a century at the top of British business. Charlie Mullins has already left. That is what training entrepreneurs for export looks like.

“When founders of this calibre unite around one cause the Government should listen, because these are exactly the people it needs on side to deliver the growth it has promised.”

Adamides said founders were “ready and willing” to work with ministers on growth. “Andy Burnham says he is pro-growth, and we take him at his word, but his first Budget this autumn will be the real test of this commitment.

“Stopping the creep of taxes on wealth creators, and giving business the certainty it needs to invest, would be the clearest possible signal that this Government wants Britain’s founders to build and succeed here.”

Helm says its members run scale-up businesses with combined revenue of more than £8 billion and contribute £1 billion a year in tax. The average member is the chief executive of a company turning over £21 million a year.

For owner managers outside that bracket, the practical question the Budget answers is narrower than the campaign’s framing. Employers’ National Insurance is a live cost on every payroll, and the reliefs at issue, principally those that reduce the tax due when a business is sold or passed on, are the ones that determine what a founder keeps at the end. Both are set on 28 October.

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Jamie Young

Jamie Young is Senior Reporter at Business Matters, covering SME finance, employment law and Westminster policy since 2016. He has reported on every Budget and Autumn Statement since 2018, helped make sense of the ‘covid era’ and the bounce-back loan scheme from launch through the fraud investigations, and broke the magazine’s coverage of the 2024 late-payment reforms. He joined Business Matters straight from completing his BA in Administration from Exeter University and is NCTJ-qualified. Reach him at jyoung@cbmeg.co.uk