This is part of techUK's Digital Economy blog series, where we deep dive into defining trends across the tech sector.
Labour has made growth its central mission and wants to make the UK the fastest-growing economy in the group of seven industrialised economies by the end of the parliament. The Chancellor Rachel Reeves has hit the ground running in her first few weeks in no11 Downing Street to deliver on this. Below, we outline what initial action could mean for the tech sector.
So, what has the Chancellor done so far?
In the 72 hours following the election of the Labour Party, the Chancellor delivered her first speech to room of top business people, with announcements appearing to show a lazor focus on growth.
The tech sector, and businesses alike, welcomed this speech and the focus on stability, investment and reform. There has been particular hope that Labour's overhaul of the planning system will give the UK an economic boost and lift stocks.
Announcements included immediately reforming the planning system (with a Bill expected in the King's speech this week), planning permission for two data centres, 300 new planning officers, lifting the ban on onshore windfarms and the Government will consult on creating a Nationally Significant Infrastructure Projects (NSIP) route for onshore wind.
Alongside this, Reeves outlined the priorities for how the new Labour will run Treasury. A Growth Delivery Unit has been established at the heart of HM Treasury and preparations have begun to establish a Growth Mission Board that will meet before Summer recess.
Reeves has indicated that the Treasury dedicate increased resources for focus on growth. Spencer Livermore will serve as as deputy Minister for growth, and Chief Secretary Darren Jones will focus on tax.
Securonomics playing out in action
Rachel Reeves' securonomics, her guiding economic philosophy, sees an economic model that recognises an increasingly fractious global world and period of recent economic instability. It sees the Government work more strategically with the private sector on an industrial strategy. As well as actively seeking to disperse growth opportunities across all regions of the UK, with more decision making from mayors and local government.
Securonomics has already been playing out in action. For instance, other updates last week also include launching a new National Wealth Fund (NWF) through reforms to the UK's public investment banks and beginning to form a new council of economic advisers. Along with announcing an Industrial Strategy Council and greater devolution through an English Devolution Bill, giving new powers to metro mayors and combined authorities.
The NWF will focus on strategic net zero technologies and pool in private sector investment. It aims to attract £3 of private cash for every £1 of public funding put in via the NWF. If successful, this would take total investments to about £29 billion. So far, areas of strategic investment include £1.8 billion of public funding to ports, £1.5 billion for gigafactories, £2.5 billion for clean steel, £1 billion for carbon capture and £500 million to green hydrogen.
On the council of economic advisers, Jon Van Reen (innovation expert and former Downing Street policy adviser under Blair's New Labour) will head the body. Others tipped to be on the Council include Anna Valero at the London School of Economics and Neil Amin-Smith, previously at the Institute for Fiscal Studies.
It's clear that growth is the national mission to improve lives and deliver on public services, and we have no time to waste. It's no surprise we've seen several Secretary of State's have since been describing their own departments as ‘growth' departments (whether Wes Streeting in the Department for Health and Social Care or Peter Kyle in the Department for Science, Innovation and Technology).
The King's speech recently further outlined bills geared towards growth. This included the Budget Responsibility Bill delivering on the manifesto commitment to introduce a ‘fiscal lock'. Along with the Planning and Infrastructure Bill to reform the planning system, turning it into an enable of growth. Read more on this via our techUK insight.
techUK will support the Chancellor to deliver on the growth agenda
At techUK, we believe this mission is the right one, with increased econimic growth and reform needed to address the challenges the UK faces. Following our recent Seven Tech Priorities report and UK Tech Plan reports, we are working with our members to develop our growth plan ahead of the next fiscal event.
This comes as the OBR recently predicted that the widespread use of AI technology could support raising productivity by half a percentage point by 2028/29. In turn, the Government could expect to have an extra £39.9 billion of spending money while also reducing costs by £6.2 billion.
Our growth plan will call for a strategy that focuses on building the right foundations, empowering Britain's everyday economy and capitalising on the UK's unique advantages and growth opportunities.
We look forward to working with Rachel Reeves and HM Treasury to seize the role of the tech sector and digitsation to deliver economic growth across the whole of the UK.
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