AN ASIAN business leader at the top of one of the world’s biggest investment banks has warned that continuing uncertainty over the UK’s tax and regulatory plans is weighing on small companies and delaying decisions on investment and hiring.
Kunal Shah, the co-head of Goldman Sachs International, told The Times that many entrepreneurs feel unsure about the policy direction of the government and are waiting for greater clarity before expanding.
Shah, who is based in London and took up the role earlier this year, said concerns include higher taxes and possible changes to employment rules.
“One of the things that comes back often from these companies is the tax burden in the UK,” Shah was quoted as saying. He added that last month’s budget underlined “how tough the fiscal maths is now”, making it harder for business owners to plan. “It introduces challenges for any entrepreneurs and the business environment here.”
Shah, 43, spoke ahead of a House of Commons event marking 15 years of Goldman’s 10,000 Small Businesses training scheme, which offers free management training and access to a peer network for small firms.
More than 2,500 companies with annual revenue above £250,000 and staff numbers between five and fifty have completed the course.
He said that although owners are “largely optimistic” about their own firms, wider uncertainty linked to political pledges still weighs on confidence. “It is all the uncertainty you have over the manifesto pledges that can hamper investment confidence. That continues to be an overhang," he added.
The government recently revised its plan to give workers day-one protection from unfair dismissal, agreeing with unions that the right would instead apply after six months, reduced from the current two years. Shah suggested that questions over further changes are causing business owners to pause investment decisions.
Shah studied mathematics at Cambridge University and joined Goldman Sachs in 2004. He became a partner in 2014 and previously headed the bank’s global emerging markets division.
According to him, there are signs that could help the UK economy, including trade agreements with countries such as the US and India, and clarity on tax for next year. But he added that slow economic growth is affecting confidence.
“There is a broader, longer-running productivity problem,” he said. Combined with persistent inflation and restrictive interest rates, this “feeds through to the finances at these companies”.
Research by Professor Mark Hart at the Enterprise Research Centre found that participants in Goldman’s training scheme grew their companies’ revenue by 43 per cent on average within three years, equal to about £665,000 in extra income. After ten years, they were also more productive than similar firms that had not taken part.
The government runs a parallel training scheme, Help to Grow, which has been funded until 2029 and has enrolled around 10,000 small business leaders since 2021.
Shah welcomed the government’s engagement with the banking sector and said ministers had shown interest in how to strengthen growth and competitiveness. He praised the recent “stamp duty holiday” on share trading in newly listed companies, saying it showed a “pragmatic approach” to supporting capital markets.
The Asian leader said Goldman Sachs expects strong fees next year, supported by a busy mergers and acquisitions pipeline. “Our advisory business continues to be right at the top of the league table,” he said.
He added that recent listings, including the £1.9 billion flotation of Shawbrook, show that activity in capital markets is picking up.
