As the third Prime Minister in as many years gets her feet under the Downing Street desk, the tech sector may not be on her, or most political commentators, minds. Coming to office after a succession of scandals eroded confidence in Boris Johnson, issues like the Russian invasion of Ukraine, the cost of living crisis and, of course, the succession of King Charles III are dominating the headlines.
But a new Prime Minister inevitably brings an enormous amount of ministerial change, meaning that policies and priorities can also change. We asked some leading names in the tech sector for their thoughts on, and hopes for, the new Prime Minister and government. And while all welcomed and congratulated Liz Truss, they all hoped that her new government would support and improve the tech sector.
Continuing support for the sector
Several industry leaders noted that, behind the scenes, government support for the sector has always been positive and hoped that it would continue. Dr Maria Lema, co-founder of Weaver Labs, a telecoms start-up, said, “I hope the new PM keeps the same agenda in telecoms – as the diversification work is central to our success and expanding UK presence in the telco market worldwide – so is the work around cybersecurity.”
Others also hoped for a continuing positive relationship. IQ Capital Managing Partner, Kerry Baldwin, stressed the support the sector had received from the government in recent years, which she hoped would continue, “transparency between government and business is vital, and we hope Liz Truss’ new team will reach out to understand the UK’s deep-tech venture capital, science, and technology ecosystem. We look forward to supporting the new ministers as they look to meet the groundbreaking deep tech founders in the UK.”
Others hoped that the traditional Conservative promise of tax cuts, reasserted by Truss during her campaign, could benefit the sector. Sarah Barber, CEO of Jenson Funding Partners, specifically highlighted the tax-changes that would benefit start-ups. She called for Truss to, “drop the sunset clause for Enterprise Investment Scheme (EIS). The fact is, the thing that startups want more than anything in the world is consistency. They want to be able to plan for the next 3, 5, 10 years. They need assurance that EIS will continue to be there for them.” She also called for a review of the Seed Enterprise Investment Scheme (SEIS). “The Government should look at increasing the amount start-ups can raise through SEIS – and if they’re worried about founders spending it all too quickly, they could split the investments into tranches. If founders can raise more cash in one go, then they can spend less time fundraising and more time doing what they do best – running a business.”
Her calls were echoed by Angelika Burawska, COO of SFC Capital. “Our expectation is that any tax element will be linked to investments in home-grown entrepreneurs,” she said. “We have the tools in the UK — both the EIS and SEIS — to ensure that this cash does not sit idle, and is circulated back into the economy. A high-growth economy can happen, but we need the right environment for entrepreneurs to innovate.”
Protecting London’s status
The capital’s position as a world-leading financial centre should also be a priority, according to Funding Options CEO, Simon Cureton. “There are reasons why the UK’s financial sector is so admired overseas, not least the rule of law, regulation, and expertise that resides within the Square Mile and beyond, he said. However, he warned that we should learn from the response to Covid. “Covid unfortunately showed that when a financial crisis hits, as a nation and a government we revert to type by giving precedence to the incumbent institutions,” he explained. “The more we do to foster an environment in which small businesses are helped and not hindered, the better it will be for the UK, business owners, and the fintech community’s ability to export its prowess to other major economies.”
Truss’s other comments about reducing regulation were also welcomed. Moray Wright, CEO of Parkwalk Advisors, also expressed hope for the new Chancellor, Kwasi Kwarteng, “he is in a prime position to deliver the changes to the UK’s financial sectors, which could unlock capital and encourage further investment into the UK’s high-growth technology businesses. He continued, “the UK is a world leader in R&D with significant intellectual property in the sectors of tomorrow including AI, life sciences, cleantech, medtech and quantum computing. It’s time to unlock the capital to support them.”
Looking beyond London, and the world!
Skyrora’s Head of Government Affairs is keen for Truss to have extensive ambitions. “The new administration has the rare opportunity not only to demonstrate critical and urgent housekeeping for the UK’s economy, but also to invest in accelerating and unleashing the highly ambitious Space economy and driving the prosperity agenda forward,” he said. “The current upwards trajectory of the UK Space sector must be recognised and intensified, with the Government committing to speed up early returns. Namely, by investing in groundbreaking research & design, and creating ‘green’ jobs. This would truly make the UK a leader in the New Space generation.”
But, perhaps, Sarah Barber, spoke for almost everyone when she told us, “ultimately, many UK startups will just be pleased that it’s over and that the new Prime Minister can crack on with the job.”