From taxes to talent, UK tech reacts to Liz Truss becoming prime minister

Liz Truss prime minister Image credit: NO 10 Downing Street via Flickr

Liz Truss has been announced as the leader of the Conservative Party and the UK’s new prime minister.

On Monday at the Queen Elizabeth II Centre in Westminster, Sir Graham Brady announced Truss had beaten Rishi Sunak with 81,326 votes to 60,399 votes.

The new prime minister has a bulging in-tray full of high-priority issues, from tackling the energy crisis, bringing down inflation and weathering the predicted recession.

When it comes to tech, Truss must also deal with issues such as talent shortages, the need for a semiconductor strategy and ensuring the country keeps the momentum that has propelled the industry to a $1tn valuation.

Technology entrepreneurs, investors and other industry stakeholders have shared their thoughts with UKTN on Truss’ victory, with reactions ranging from a warm welcome to scepticism.

“Ultimately, many UK startups will just be pleased that it’s over and that the new prime minister can crack on with the job,” said Sarah Barber, CEO of Jenson Funding Partners. “Support for growth businesses rarely came up during debates, so there wasn’t a huge difference between the two [candidates].”

Fintech industry body Innovate Finance has described Truss as a “champion of fintech investments and exports and supported the trade sector in trade negotiations as well as engaging directly with founders and CEOs”.

However, technology lawyer Henry Humphreys of Humphreys Law is less hopeful about Truss’ tenure as prime minister. It’s hard to find evidence that the government is helping UK businesses, he said, adding that any technology growth is not a result of any government policy.

“I hope to be proved wrong, but I have seen nothing from Ms Truss thus far in terms of detailed thinking that goes to attacking the question of how UK tech can better compete with the US, China, etc and which areas it should try to do so,” he said.

Truss is yet to announce her cabinet, but that hasn’t stopped some from voicing their preferences.

Moray Wright, CEO of Parkwalk Advisors, is hoping for Truss to appoint Kwasi Kwarteng, currently business secretary, as chancellor.

“He has already vowed to unshackle our businesses from burdensome taxes and unsuitable regulations,” said Wright.

“With his experience at the Department of Business, Energy and Industrial Strategy, 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.”

Liz Truss’ tech to-do list

Russ Shaw, founder of Tech London Advocates and Global Tech Advocates, said that one of the new prime minister’s biggest tasks is to address the UK tech talent shortage.

“Solving this issue will require the new prime minister to make it easier for foreign workers to apply their skills in the UK through expanding schemes like the Scaleup Visa, while also investing in homegrown digital education to improve the domestic talent pipeline,” he said.

Shaw said Truss should prioritise a semiconductor strategy for the purpose of soverignty and national security. It comes as the decision regarding the take over of Newport Wafer Fab by Nexperia has been further pushed back.

Shaw added that the government is yet to implement the recommendations from the Kalifa Review and that Truss should increase the R&D investment to more than the 2.4% of GDP by 2027 that was pledged by the previous government.

Tax support for startups

Angelika Burawska, COO of Cheshire-based SFC Capital, believes Truss can stimulate the UK into a high-growth, low-tax economy to recover from the oncoming recession. Burawska predicts that any changes to taxes will tie in with investments in the country’s entrepreneurs.

“Some will criticise this as leaving more money in the pockets of the wealthy, but we have the tools in the UK (both the Enterprise Investment Scheme and Seed Enterprise Investment Scheme), to ensure that this cash does not sit idle, and is circulated back into the economy,” Burawska told UKTN.

This was echoed by Barber, who called on Truss to “drop the sunset clause for EIS”.

She added: 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 three, five, 10 years. They need assurance that EIS will continue to be there for them.”

Barber also believes Truss should look at increasing the amount that startups can raise through SEIS.

“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,” she said.

Supporting the UK in space

Alan Thompson, head of government affairs at Skyrora suggested how Truss can contribute to the UK’s interplanetary affairs.

“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.”