Prime Minister Rishi Sunak began last week telling a room full of nearly 250 business and tech leaders that he is “unashamedly pro-business”. Speaking at the inaugural Business Connect summit, Sunak’s driving message was that his government is here to listen to the concerns of businesses.
It was a chance for the prime minister to reset relations with private industry after the calamitous events of his predecessor, with one eye on the next general election.
Sunak’s week wooing business leaders comes against the backdrop of an existential crisis for the CBI, the UK’s largest business lobby group, after it faced two allegations of rape by female staff.
Labour, which continues to enjoy a healthy lead in the polls, has made it clear it intends to go toe-to-toe with the Conservatives on business. Its own leaders have been holding regular meetings with industry leaders. Both parties are keen to show support for tech startups – Labour with its startup review, the Tories with its “Unicorn Kingdom” campaign.
Last Monday, Sunak held a virtual Q&A session with business leaders on LinkedIn Live, then took questions in person from tech leaders at the likes of Monzo, OakNorth, and Improbable at Business Connect in North London.
Tech leaders raised concerns about regulation impacting smaller businesses, government support for UK companies expanding overseas, and support for scaling up. Most questions were not hard-hitting, but others showed Sunak still has work to do.
Gerry Murphy, chairman of fashion group Burberry, slammed Sunak’s decision as chancellor to remove tax-free shopping for tourists as a “spectacular own goal”.
Sunak replied that his government is “here to listen”.
The government’s announcement to accompany Business Connect was an artificial intelligence taskforce backed by £100m in government funding to “accelerate” the UK’s generative AI sector.
The taskforce will be filled with experts, Sunak said, and styled after the Covid Vaccine Taskforce to look at areas such as access to talent, regulation, and competitiveness.
Its goal is to ensure the UK keeps pace with rapid advances in technologies like ChatGPT, the advanced chatbot created by OpenAI. The taskforce approach is more open than Italy, which last month became the first Western country to ban ChatGPT.
Speaking at a media huddle that included UKTN at Business Connect, Sunak said: “Governments can’t wish this away and pretend it’s not happening – it’s right that they engage with it properly because we need to get the balance right between supporting innovation and protecting ourselves against risk, and the government needs to be active in that.”
The £100m is considerably less than the AI budgets of US and Chinese tech companies. Sunak said that people shouldn’t “look at the £100m in isolation”, pointing to the £900m previously announced in the budget to support compute infrastructure in the UK.
He added that the UK “has every opportunity to be a world leader” in AI and that when it comes to regulation the UK has “not gone down the EU’s far more prescriptive, mandated vertical move”, adding that AI regulation will be “adaptive because it is a fast-evolving area”.
Two days later, the UK’s tech regulations came under the spotlight for a different reason. On Wednesday, the UK’s competition regulator blocked the $68.7bn merger of Microsoft and Activision over concerns that it would lead to reduced “innovation and less choice for UK gamers”.
The US tech companies came out swinging. They warned that the decision would “stifle investment, competition, and job creation throughout the UK gaming industry” and that it “discourages technology innovation and investment in the United Kingdom”.
For Sunak, the timing created an unfortunate parallel that put his rhetoric at odds with the actions of the country’s regulators. The same day as the Competition and Markets Authority’s decision, Sunak visited a gaming event hosted by Ukie, the computer game trade body.
In a LinkedIn post, he said: “The UK attracts investment from video game multinationals thanks to our world-class skills base and creativity, with many global players investing directly in UK studios.”
CBI: ‘Elephant in the room’
The serious allegations against the CBI cast a shadow over Business Connect. During the Q&A, fund manager Helena Morrissey raised concerns with Sunak that the CBI scandal could deter women from entering industry.
“We need everyone to feel they’ll be respected and included if they join industry,” said Morrissey. “It’s a bit of the elephant in the room but we’re meeting as horrible allegations swell around the CBI.”
Sunak responded: “I have two daughters. I want to make sure that they grow up in an economy, in a society where every opportunity is available for them. And that’s what we all want to do.”
Sunak was asked later by reporters if the CBI was fit for purpose. He declined to go into more detail.
“On the CBI, the allegations are obviously serious and it’s right that they’re investigating properly, that’s what’s happening and it’s hard for me to comment beyond that,” Sunak told UKTN and other trade press.
The scandal at the CBI raises broader questions about the role of business lobby groups, and the communication channels between government and industry. With businesses leaving the CBI in their droves and the lobby group pausing membership activities, some are asking what – if anything – should fill the void.
Sunak pointed to Business Connect and the discussions he held with entrepreneurs and investors at Downing Street last week as a sign that the government is listening to enterprise irrespective of the CBI.
Tech leaders that spoke to UKTN said listening is a positive first step, but that the prime minister must back up words with actions.
“The government has begun to lay the groundwork for stronger industry collaboration,” says Russ Shaw CBE, founder of Tech London Advocates and Global Tech Advocates. “While this is a positive development, tech leaders need to now see policies to match the rhetoric.”