Oral evidence: Entrepreneurship and business, HC 728
Oral evidence, 27 October 2026.
Witnesses
Edward Woodall, Joe Harrison and Lee Wilcox.
Chair
Welcome to the final panel in today’s hearings as we open our inquiry into entrepreneurship. Thank you so much to our witnesses for coming along to give evidence today. Lee Wilcox, I will start with you. When you think about the people you are working with, what do you think are the biggest barriers to getting a business or a trade set up and expanded now? Some of the challenges have changed a bit and you have done a great job in helping communicate some of those issues.
Lee Wilcox
Thanks for having us. What is the challenge when starting a business? I know that there are questions around how they finance it. One of the biggest barriers is cashflow and funding the jobs that they are trying to win. Often it is not necessarily that they have a huge challenge in winning work. If you are good, you will continue to win work. It is more about managing the cashflow to fund the job before and buying the materials, but then also getting paid is probably the biggest challenge. There are a load of other things. A lot of trades are very fearful at the minute. There is some ONS data to show that their fears have been backed up over the previous months by rising material costs. This has been a huge thing for the trade, particularly since covid, but we feel like it is definitely happening again at a higher rate. I would generally say cashflow and then the knock-on effect that has around stress and wellbeing in the trade. We already have, unfortunately, the highest suicide rate of any industry and wellbeing is poor. Two people a day die to suicide in construction. There are some serious wellbeing challenges among a group of people who end up running a business because they are really good at their job, not because they necessarily know how to run a business. I definitely think the cashflow is the biggest challenge.
Chair
Will new legislation on late payments begin to help with that? We do not think it has gone far enough, but don’t let me put words in your mouth.
Lee Wilcox
Yes, potentially. The PM gave a good push around rogue traders but I actually, on the flipside to that, would love to see something around rogue customers. It flips on its head and it is a real hidden challenge. Name me an industry where you have to chase for your money so often when the job is done and people are using the product. It might be in their home or somewhere else. It is a really tough job for them to get paid, definitely.
Chair
We have heard evidence this morning that suggests that the level of entrepreneurship has doubled in our country over the last 25 years, but there are these newer, starker challenges at years 2, 3 and 4. Is that the kind of pattern that you are seeing?
Lee Wilcox
No. I actually heard that. I luckily got here for the start. That is not the pattern we are seeing within construction. There is data—let me quickly find it—around general construction in terms of businesses starting, but particularly around SME home builders. We have lost thousands over the last couple of years, and that is a difficulty. The main reason that you will find is viability. There is section 106 and CILs. There is a huge amount of red tape that has gone into the home building industry now. Let us face it: if we want to hit the numbers we want to hit, it is not about having your tier 1 and tier 2 home builders. It is about having your SMEs; it is about having that long tail of industry. Unfortunately, at the moment, more of those businesses are going out of business than ever. It speaks less to domestic tradespeople, but, certainly, on that home building side, there is good data to show that we have lost a lot of businesses.
Chair
That is very helpful for us to understand.
Sarah Edwards
Hi, Lee.
Lee Wilcox
Hi, Sarah.
Sarah Edwards
You are from Tamworth.
Lee Wilcox
I am from Tamworth.
Sarah Edwards
Big up Tamworth. You made a really good point about how important the ecosystem is. I chair the SME house builder all-party parliamentary group, and we talk a lot about that. It also creates the whole supply chain of jobs. These are individual entrepreneurs who are businesspeople themselves. From your experience, how are people feeling about that positivity? We know that construction is down about 30%. What would make somebody go into what traditionally is an amazing industry with brilliant skilled jobs and lots of interesting things that you can do? At the moment, it is very hard to see why somebody would do that. We desperately need them. Otherwise, we cannot grow this country.
Lee Wilcox
Yes. The sentiment is opposing the opportunity. I have been running the business for 12 years. The last two years is the first time that I have seen construction being talked about so positively. I can go on for ever—I will not because I know we are short on time—on all these things. When people leave education and go into construction, often it is not championed. It is because they fell into it. It is a failure. For younger people going into construction, there are stats around saying that four in seven are neurodiverse. They are already trying to learn in a different way. The sentiment in the industry at the minute is pretty bleak. There is quarter-on-quarter downturn on the positive sentiment around rising material costs. In Q1, 60% of tradespeople were worried about rising costs. That went up to 63% the following quarter; it went up to 69.5% last quarter. The same pattern shows around chasing money. They are all expecting it to be harder to get paid. I mentioned earlier poor mental health and wellbeing. I have kids. I have a daughter. I have a son. I have one on the way. I love this industry.
Sarah Edwards
Congratulations.
Lee Wilcox
Thank you. I would love to promote it to them and say, “Join this industry”, but, if I am being completely honest, I do not know whether I would at the minute. It is a tough place to be. That is coming from someone who absolutely adores the industry and wants more people in it. Unfortunately, the sentiment within the industry is not matching with what we all know the opportunity is. We know that AI is coming for other industries and not so much for this one yet, and hopefully it will not for a long time. The investment and the positive sentiment from Government and industry around what is to come is not matching people’s feelings. That is a big problem.
Chair
That is very helpful. Let us just build out the picture on high streets and markets.
Dan Aldridge
Joe, can I come to you? In my town, North Somerset Council and Weston‑super‑Mare Town Council very recently pulled together Weston Independent Market. It has been fantastic; it has been a great thing to see all these independent traders come together. One thing that I am concerned about is the longevity and sustainability of that. Are markets still providing an affordable route into business ownership for people? What are the barriers that you are seeing, from your perspective?
Joe Harrison
To be quite honest, the honest answer is that, yes, markets are providing that. There is more diversity in the types of markets that are available to go into. That is more artisan products, world food and hot food products. The industry probably has a lower barrier of entry than most. It is probably the second-oldest profession known to man. It is seeing growth, and it is seeing growth in the numbers of markets. Our concern would be the sustainability of those individuals. That is not necessarily about the finance being made available for them to grow their business—they are all independent individuals—but about the availability of guidance on how they can continue to grow. It is having somebody at the other end of a telephone to share a problem with and that type of thing. That is the biggest issue that we see going forward. These days, nearly every event has a market element. Every festival has a market. The rent collected from the market pays for the headline acts on the stage. We are seeing a lot of positivity. As an organisation, we have been running a young trader market programme for the last 14 years. We have seen that exponentially grow from 50 traders in its first year to us running a programme of 400 individual local events last year. We had 12 regional finals. We put a bit of competition in it as an X factor. We have run the national final in Manchester for the last five years, but we moved it to the middle of the country. With the growth in the number of people coming in, we moved it to Stratford-upon-Avon. There is a beautiful place to hold a market by the waterside, with the Shakespeare Theatre at the end of the market. We have seen that grow. About 1,000 take part every year across the piece. There are pockets of the country where it is not being picked up, and we would like to improve that situation. We would like to get every MP supporting our young trader market. Through our all-party parliamentary group, we want to achieve that.
Chair
Is the number of markets growing?
Joe Harrison
The number of markets is definitely growing. You are in a city where we have probably the most comprehensive database of markets in the UK. We used to have a database of about 180 markets in Greater London. Now, there are somewhere near 300. That has largely been added to by artisan products and suchlike. If you come out of any of the major train stations, there is generally a market waiting to greet you. There is a lot of positivity. It is just that the conditions for some of the people who might be running these new markets is a major concern to us as a body.
Chair
Edward, do you want to help us build out the picture? Can you tell us about high streets and convenience stores as well?
Edward Woodall
I am Ed from the Association of Convenience Stores. There are 50,000 convenience retailers out there. If there is a big challenge in terms of new entrants to the market, I suppose it would be about raising funds. Like Joe, I would have talked about the low barriers to entry in convenience, but now that phrase has a shelf life for our sector. You have to raise quite a lot of funds to be able to buy or lease a going concern convenience store. There are a lot of costs and personal guarantees associated with it. While the number of stores in our sector remains quite stable—there are about 50,000—if you are a single-site operator coming into the sector, you are up against a lot of barriers. You have to take on a lot of debt to be able to start trading.
Chair
How much is a lot of debt?
Edward Woodall
If you are taking on a going concern, you would be looking at something like 10 times the weekly turnover of the store. If a store is doing £10,000, you are looking at £100,000 to start up. If you are fitting out an empty unit from scratch, you would be looking at something like £120,000 to £150,000, plus £40,000 to £60,000 for stock. It is a lot to borrow. The interesting conversation with retailers is about where they finance that from. Over the last decade, every year we ask them, “Where do you get that financing from?” and 60% will say it is from their own reserves or from family. It is not from institutions.
Chair
People are mobilising a quarter of a million quid from their own networks.
Edward Woodall
Yes, from their own savings, from family and from their networks. That is what it costs. From a banking institution perspective, they would see the setup of a shop, a convenience store in particular, as probably quite risky.
Chair
Joe, do you have a sense of how much people are having to mobilise to get going as a market trader in comparison?
Joe Harrison
There are different levels. For the artisan or craft artist type of trader, it is not really that difficult. When we are going into the catering side, street food and suchlike, with the actual layout for assets, such as vans, trailers and suitable equipment that will meet all the hygiene standards and what have you, it is a large outlay.
Chair
Would it be around £100,000?
Joe Harrison
Yes, about £100,000.
Chair
Lee, I should have asked you this as well. For a lot of the people you are working with, how much do they need to get going?
Lee Wilcox
If you are talking about a sole trader domestically, it is not a lot. Often, they will have started in the industry and worked for someone. They have their tools. For 41% of the audience we surveyed last quarter, their next job is worth under 5 grand. You are probably talking 10 grand, all in, to set up a business. You have your tools already; you probably have a van. It is very different if you are a house builder. You are into completely different funding territory then.
Chair
That really helps us.
Alison Griffiths
I am going back to ask Joe something. In Bognor Regis and Littlehampton, my constituency, we have set up a very successful market in Littlehampton, and Bognor Regis has followed suit. That has really come about as a consequence of a town centre action group in both places using it as a way to galvanise our high streets, which is the conversation that we were having in the previous panel. I am just really curious about whether that is a model that you are seeing replicated in other towns, where the town council is looking at how it can galvanise the high street by bringing in and incentivising markets to take place.
Joe Harrison
In large part, that is the model because the responsibility for markets is being passed down from regional and district councils to town councils. At that model level, it really is an idea with a high success rate. As I mentioned before, my concern is that some opportunists are coming into markets privately operated. There is a shortage of cash in spending now; it is all on cards. These operators are making traders use their card machines. The turnover is going into the operator’s bank account, and the traders are receiving payment five or six days later. That is our major concern. We are bringing it up at our all-party parliamentary group at every opportunity. We are seeing the growth in markets and artisan things. There is always the rogue who is looking for an easy touch. We have had event organisers go to the wall where all the traders’ money has been lost altogether.
Chair
That is very useful.
Joe Harrison
It is a really serious concern to the industry.
Alison Griffiths
Can I also ask a quick follow-up question to Edward? Those sums of investment, and those for market stalls, are eye-watering. I am just curious about what return on investment in percentage terms a trader, whether running a convenience store or a market stall, could expect to see. Is it a good plan on their side? Are they going to do better than putting it into a bank account?
Edward Woodall
They will have some background in running stores in order to be able to raise that in some way. You often get people who have run stores as managers or commission operators, so they will know how to do it. You will have to build up over a period of time. It will probably be two to three years before they start seeing payback from the initial investment. Yes, it will pay back, but it will take time. You will probably have to make ongoing investment as you go through. It will be a three-year cycle from the start before you start to recover those costs.
Mr Reynolds
Ed, your team very kindly showed me around one of the convenience stores in my constituency. You said £120,000. He has put hundreds of thousands of pounds into his business, revamping it as the jewel in the crown of the town that it is in. That takes a lot of capital, and it requires him to already have premises. How difficult is it to secure a lease for those who have not run their own business before, who might have been a manager before and are trying to start out their own unit?
Edward Woodall
To my initial point, it is difficult if you are a first-time operator. It is almost the opposite situation to what Lee described. In the convenience sector, if you have two to three sites, you have something to demonstrate your prowess, your financial background. If you are starting out, it is much more difficult. Particularly in connection with leases, that means you are probably going to have to have more personal guarantees. You might need a year’s worth of rental up front to guarantee that. You are also going to have to have a lot of support to get that first lease. Leases are complex. You will need a lawyer; you will need a solicitor to manage that complexity. It will be really challenging for a single-site operator to start up and demonstrate that. That is a challenge across the board. Whether you are borrowing money or getting a lease, you have to be able to demonstrate your ability to do that.
Mr Reynolds
Back in 2012, the coalition Government launched the small business lease, drawn up by the British Retail Consortium with the Royal Institution of Chartered Surveyors to try to make it simpler for small businesses to get leases and do that work. Everyone admits that it has not worked because the uptake from landlords has not been there. What can Government do to try to incentivise landlords and institutions to take a risk on a small business or an individual where there might be larger national chains that want to do it instead?
Edward Woodall
That is a really good question. I am not sure I totally have the answer. The standardising of leases is difficult, in the sense that there are a lot of complexities. If you are going into an office building or certain locations, it is going to be challenging. Having a register of commercial landlords so that we could find them easily and have conversations quicker is one thing that frequently comes up. You spend a lot of time and energy just trying to make contact with the landlord and talk to them about the lease. There are things around financial terms in leases. Sometimes financial terms are put in leases that would prevent them from being sideway leases elsewhere. They put turnover thresholds that you have to be able to demonstrate. That prevents other smaller businesses from being able to enter that space as well.
Chris Bloore
Very helpfully, you have talked about some of the pressures and some of the things that are impacting entrepreneurs at the moment. We are really interested in how operating costs, the fear of operating costs or seeing other businesses struggle are impacting people who have an idea and want to take that next step forward and start a business. Is that subduing their enthusiasm to start a new business?
Lee Wilcox
I would definitely say yes in construction. There are two sides to construction. You can talk around the more macro side: the tier 1s and tier 2s doing infrastructure and home building. You then have the SME market or the domestic market that goes into people’s homes, electricians or plumbers, who help us out and keep our house warm, etc. For the latter, all the risk is on them. Currently, material costs are becoming higher. Our data is always predictive around how trades are feeling into the next quarter. ONS has just cited that 52% of construction business reported higher purchasing prices in the previous quarter. They are marrying up, and that is a risk for trades. Often, the feedback that we get from a sole trader or someone who has maybe one or two employees, which is the real long tail of construction—we have the highest proportion of SMEs in any market across the UK—is about the risk of taking someone on in a market where they are a little bit unsure about what is happening within the next eight weeks, which is the lead time now. A year ago, it was at 12 or 16 weeks. It is now up to eight weeks. They just cannot take that risk. If you look down the chain, what does that do? Anyone in education in a college needs connecting with an SME. You cannot work in construction and not go to a site or do any practical learning. We are seeing higher college dropout rates because people are either getting to the end of the course and still do not quite know how to do the job or they are not finishing the course. The knock-on effect of that is that we do not have the workforce that we need. Businesses cannot grow. It is knock-on after knock-on. The appetite for an SME to grow their own business is a huge challenge. They do not really get any support for taking someone on. Yes, there are levies that they can draw down, but they often do not really know how to do that or do not want to do the paperwork. It is not a significant enough amount of money to cover what they need. It is different to the white-collar world. If I have someone in my office who is an apprentice for 18 months, it is a hell of a lot easier for it to be risk-free for me in terms of giving them things to do, them not causing any challenge for clients or whatever that might be. If you are a tradesperson going into someone’s home, it is a lot more difficult, one, to give them work to do. They are often in the way. It is not only the financial impact. It is the time it takes to take people through the industry in the right way. There just is not the incentive there. It is all just layered in risk. It is definitely hindering the long tail of our industry, which is really important.
Joe Harrison
The biggest problem in the markets industry is growth. We all probably know that the household names on the high street all started from market stalls. That is the end goal. Not everybody is going to become the next Marks & Spencer. It is growth. The energy costs, especially if they are making their products, fuel costs and salary costs will restrict them from growing the business from the one unit that they used to run to being on half a dozen markets that they could have staff at. That cost has increased. It is also about the ability of young people to work before they are 16. I did it as a young person. I started on a market at 14 helping to load vans or whatever. As a nation, we should really look at these young people in school being able to work a certain number of hours, which would lead to them being work-ready at the end of school. In the last two finals of the young trader market that we have held, nearly 50% of the traders were neurodiverse. They came into markets because it is a very inclusive industry to people from diverse backgrounds, ethnicities and what have you. To be able to take somebody on to help you grow, they need some work experience. Everybody is asking for experience and we are not allowing any to be given. About two years ago, the DWP was looking at bringing back that kind of thing in a measured way, but giving some actual practical experience. I am sure that is the case on the building side. They have left school, but in effect they are just going back to school. They are not doing the practical side, which is what we really need them to do.
Edward Woodall
The cost of trading is a big factor. Thankfully, there is lots of mentoring in our sector when people try to come in. The big conversation that they are having is about employment costs, business rates and energy costs. We employ 456,000 people in the sector. The cost of wages has gone up, but the number of employees has stayed the same. It is just that we are paying for fewer hours. What is happening is that the retailer is doing more hours themselves. They are operating the business themselves. When they are working in the business, they are not necessarily working on the business. They have to factor in how many hours that they will have to work to make it profitable to pay back the loans and the money that I set out before.
Alison Griffiths
I was just really keen to understand—this is particularly to Lee, but, if it affects both of you, please let me know—whether the apprenticeship schemes are working well for small businesses in the trades in particular.
Chair
Lee, you were alluding to this.
Lee Wilcox
The answer is no. It is a really strange environment at the moment. Broadly, the industry is crying out for people in numbers. That is the messaging that everyone gets. Regionally, you can look across colleges. I will give you the example of the West Midlands Combined Authority. There are 23 colleges there. All of them are oversubscribed for construction courses—every single one of them.
Alison Griffiths
Which courses?
Lee Wilcox
Any construction and engineering-based course. Across the region, the dropout rate in terms of then going into a job in construction is something ridiculous like 60%.
Chair
Wow.
Lee Wilcox
We do not necessarily have a problem with attracting people to apprenticeships. We have a really big problem in connecting the dots. That is about supporting the colleges with the larger firms but also supporting the SMEs and incentivising them to take somebody on. That is not necessarily a problem with apprenticeships themselves, but the practical side is being missed and therefore people are dropping out.
Chair
We are slightly out of time, but we need to ask you about the Budget.
Chris Bloore
As the final question, what would you like to see tomorrow to encourage entrepreneurship?
Lee Wilcox
I feel like we have had our win. We have been lobbying for self-employed paternity and we have got it today, which is great news. We have been doing that for three years.
Chair
Do you have one more?
Lee Wilcox
Another thing would be a further cliff for VAT. For an SME, it is very hard to compete once you go over that threshold. Nowadays, material costs have gone up. You are looking at £1,500 to £1,800 per square metre.
Chris Bloore
What would you put it up to?
Lee Wilcox
I would double it.
Chris Bloore
You would put it up to £180,000.
Lee Wilcox
I would double it. The threshold is too low and it needs to be smoothed out, which would allow trades to compete. There is often a big concern over worrying about losing out jobs to rogue traders. Anyone can get into the trade in that sense. That is how the industry works. It would level those concerns out and give people more competitive pricing and ability. I would definitely do that.
Joe Harrison
First, I would like to see some of the funding that the Government already provide being channelled through trade associations as opposed to quangos. The Government would get bang for their buck because we have the expertise, and that expertise and funding could be used to finance those mentoring situations, as I was talking about. It is a lonely place, being self-employed or running a small or micro business. Mentoring is not teaching. The whole point of entrepreneurship is that you are learning to stand on your own two feet, but it would be good to have the ear of somebody and to have that set-up. If that funding could be channelled through the trade associations, we would see a lot more of an improvement in sustainability. Don’t get me wrong: we are seeing some sustainability, but it is nothing like the rate that we could have if we did that. We all know, whether it be markets or any other business, the first two or three years is a really difficult time. Once you are established, you have the insight to grow and move on. If that mentoring system was there, it would be greatly helped. It is funding through the trade associations, basically.
Edward Woodall
At the Budget, we would really like to see the Chancellor move the small business rate relief threshold up to £18,000 rateable value. It is currently at £12,000. Despite some really good things that the Government have done, our business rates bills have gone up by 79% as a sector since 2024 because of the fiscal drag that is happening. The thresholds have not gone up as the rentable and rateable values have gone up. We want small business rate relief increased to £18,000 rateable value, so that no new small shop owner has to pay business rates.
Chair
That is nice and specific.
Lee Wilcox
Can I add one more in? We need SMEs to get paid quicker. That is the biggest thing for construction.
Chair
We will be happy to endorse that. That has been one of the best panels we have had. Thank you so much. That has really helped get our inquiry off to a flying start. That concludes this session.