UK policy uncertainty creating ‘overhang’ for SMEs, warns Goldman Sachs co-head Kunal Shah

Policy uncertainty in Westminster is weighing heavily on Britain’s small business sector, according to one of the City’s most influential bankers.

Kunal Shah, co-head of Goldman Sachs International, warned that a lack of clarity over taxation and employment laws is creating an “overhang” that is discouraging entrepreneurs from investing and hiring.

Speaking ahead of a House of Commons reception marking 15 years of Goldman’s 10,000 Small Businesses programme, Shah said founders were increasingly nervous about the government’s shifting regulatory agenda. “One of the things that comes back often from these companies is the tax burden in the UK,” he said. “The Budget last month was a focal point for everyone to see again how tough the fiscal maths is now. It introduces challenges for any entrepreneurs and the business environment here.”

Although small businesses remain upbeat about their own performance, Shah suggested that Labour’s manifesto commitments — particularly around expanded employment rights — had left many founders uneasy about future costs. “These entrepreneurs are largely optimistic around their own businesses, around things they can control,” he said. “But it is all the uncertainty over the manifesto pledges that can hamper investment confidence. That continues to be an overhang.”