Most political stories are noisy. This one is quiet. There are no protests outside Parliament, no headlines on the front of the tabloids, no Sky News graphic with the word CRISIS. There is just a steady, methodical drift of British capital and British employers towards the exit. New research from accountancy firm Baker Tilly finds that mid-sized UK businesses are growing increasingly pessimistic — with many actively reconsidering investment plans or exploring relocation abroad. This is how a country gets poorer. Quietly. Without anyone shouting about it.

The businesses that actually employ people

When politicians talk about "business" they usually mean either the FTSE 100 or a man with a stall on a high street. The forgotten middle — the firms between £10m and £500m turnover — is where the real economic action of this country happens. They are the employers of millions of workers. They are the engineering firms, the regional manufacturers, the family-owned distributors. And they are the people now looking at the UK and thinking about getting out.

Why? Because the policy environment under Labour has become impossible to plan around. Tax thresholds are frozen until 2031. Employer National Insurance has been hiked. Business rates remain punishing. Energy costs are among the highest in the developed world. And the government's signature legislative move has been to introduce more regulatory hurdles, not fewer.

This is fiscal drag plus regulatory drag

Add it up. Frozen thresholds drag more workers into higher tax bands every year. Frozen allowances drag more profits into taxable territory. Labour reforms make hiring riskier and firing harder. Net zero rules make energy more expensive than it needs to be. Each of these on its own is survivable. Together, for a firm trying to plan five years ahead, they are crushing.

So firms do what firms always do when they are squeezed: they look elsewhere. Some are opening Irish subsidiaries. Some are quietly shifting production to Eastern Europe. Some are reorganising their corporate structure to put the parent company outside the UK. None of this is illegal. All of it is rational. And all of it means jobs, tax revenue and investment leaking out of Britain.

Q1 growth was a flash, not a trend

Labour will point to the 0.6% Q1 2026 growth figure. They should be careful. Even the economists publishing the data are warning that Q1 may have been the high point of the year — with inflation, oil prices and political instability all expected to weigh on the rest of 2026. A one-quarter blip is not a recovery. And the businesses currently writing relocation plans are not basing their decisions on a single quarter of GDP.

The truth is that the Spring Forecast was political theatre. The Treasury picked the most optimistic possible interpretation of the data and the Chancellor sold it to the cameras. Meanwhile the firms that actually pay the wages were already drafting offer letters from Dublin, Lisbon and Warsaw.

What Reform UK Would Do

Reform UK would stop the bleed by stopping the cause. We would unfreeze tax thresholds and let them rise with inflation, ending the fiscal drag stealth tax. We would cut Employer National Insurance back to a level that lets British firms hire. We would scrap business rates on the smallest firms entirely and reform them on the rest. We would tear up net zero deadlines that are sabotaging British manufacturing. And we would make the UK once again a country where building a business is a credible long-term plan.

You cannot tax your way to a strong economy. You cannot regulate your way to a productive one. The British businessman is patient, but he is not a fool. He knows when he is being treated as a cash machine. And when he leaves, the country he leaves behind gets poorer. Labour has eighteen months left, at most. Every month they stay, more firms make the call.