In last week’s Autumn Statement, Jeremy Hunt, chancellor of the exchequer, outlined a number of priorities which will likely impact UK fintech.
One such priority is Hunt’s “plan to turn the United Kingdom into the world’s next Silicon Valley.”
Hunt also stated that there will be changes in EU legislation for financial services and digital technologies, which includes changes to GDPR.
A major announcement in the Statement which is set to impact big tech is tied to the Digital Markets Unit (DMU) - a branch of the CMA. The Autumn Statement states that the government will bring forward its Digital Markets, Competition and Consumer Bill in the third parliamentary session, to give the DMU more powers.
According to the statement, these powers will: “Foster more competitive digital markets; make changes to the competition framework that will include streamlined decision making and updating merger and fine thresholds; and protect consumers in fast-moving markets by tackling ‘subscription traps’ and fake reviews online.”
Additionally, Hunt stated he has asked chief scientific adviser, Sir Patrick Vallance, to, “lead new work on how we should change regulation to better support safe and fast introduction of new emerging technologies.”
The statement also mentioned its digital infrastructure project Gigabit, which aims to reach 85% gigabit capability broadband coverage across the UK by 2025, and nationwide by 2030. The statement claims that this “will ensure that every corner of the UK can access fast and reliable gigabit-capable broadband, driving economic growth and productivity.”
Speaking to the Autumn Statement, Bruce Macfarlane, managing partner at MMC Ventures commented: “The Prime Minister has repeatedly advocated a vision of Britain’s economic future in which science, innovation and technology feature prominently. Today, the Chancellor made it clear that spending cuts and tax rises would not hamper that vision. Mr Hunt’s announcement of his intention to turn Britain into the next Silicon Valley is hugely encouraging for emerging tech.”
MacFarlane continued: “While the Chancellor detailed that the Research & Development budget would be protected and increased by 2025 - welcome news for our industry - we wait for further detail to instil real confidence in the Government’s growth plans.”
Indeed, the statement reads: “For expenditure on or after 1 April 2023, the Research and Development Expenditure Credit (RDEC) rate will increase from 13% to 20%, the small and medium-sized enterprises (SME) additional deduction will decrease from 130% to 86%, and the SME credit rate will decrease from 14.5% to 10%.”
Hunt said to Parliament: “Today I protect our entire research budget and confirm that we will increase public funding for R&D to £20 billion by 2024-5 as part of our mission to make the United Kingdom a science superpower.”
Hunt emphasised the Government’s wish to “combine our technology and science brilliance with our formidable financial services,” as part of the goal of becoming the next Silicon Valley.
Khalid Talukder, co-founder at DKK Partners stated: “Everyone recognises that the country needs to balance the books, but the government must also recognise that businesses need support to drive economic growth for the long term.”
However, Dr Henry Balani, head of industry and regulatory affairs at Encompass Corporation, commented: “It’s encouraging that the Chancellor recognised the value of innovation and technology, and that the government will continue to support its growth with increased public funding for research and development, and to better integrate technology and science with an already world-class financial services industry in order to turn Britain into 'the world’s next Silicon Valley’.
Balani added that achieving the Silicon Valley goal was not unreasonable, but will require businesses, regulators, and decision makers to fully align.