Today Britain gets its third prime minister in two months. Rishi Sunak, formerly the country’s top finance minister, has a towering pile of crap to deal with once he enters Number 10 today.
But, among dealing with roaring inflation, rail strikes, rising energy bills and riotous politicians, will he also spare a thought for startups and tech?
His previous comments suggest he may be the country’s most startup-friendly PM yet.
We recap his entrepreneurial credentials.
1/ He’s pro-entrepreneur
In a 2021 interview with Sifted, while he was chancellor, Sunak spoke of his ambitions to invigorate what he called the UK’s “age of entrepreneurship” through reforms to visa rules, options schemes and research and development credits.
In his opening address to London Tech Week in June this year, Sunak described himself as a proud “tech geek” and promised tax breaks for companies doing research and development.
He’s regularly spotted at tech events like Founders Forum, his wife Akshata Murthy is an angel investor and he clearly relishes the startup mindset — he told Sifted that he wants the government to do things “that scale with impact”.
2/ He ‘gets’ Silicon Valley
Sunak studied at Stanford for a time, where he is said to have been “infected” with Silicon Valley’s tech bro mindset and is often pictured in Zuckerburg-esque hoodies and sliders.
Back in 2021, he told Sifted that he wanted the public sector to adopt something of the startup mindset. “We want to move quickly, be highly consumer-orientated and do things that scale with impact,” he said. “We want to do things that are technology-centric as that’s how people are living their lives. So hopefully we can have that ‘startup Treasury’ mindset.”
3/ He’s played at VC and knows finance
In May 2020, during the pandemic, Sunak launched the Future Fund, a support package for high-growth startups which saw the British government coinvest with VCs into businesses affected by Covid.
£1.14bn was eventually invested, via convertible loans, into 1,190 companies. 34% of those companies were technology and IP-based businesses, according to the British Business Bank.
The 2022 Digital Strategy, unveiled by Sunak in June, encouraged UK pension funds to invest in scaleups as a key priority.
And it’s no surprise that he understands the priorities of large institutional investors like pensions — Sunak worked at Goldman Sachs for three years before joining a hedge fund.
So is he really startup friendly?
All signs point to Sunak continuing to be extremely supportive of the UK’s startup scene.
Economic output has slumped amid political uncertainty, rising costs and interest rates — but tech is a comparatively resilient sector. According to non-profit Virgin StartUp, startups account for 12% of all employment across the UK and contribute nearly £200bn a year to the economy. The Digital Strategy suggested that if UK tech companies were given the support it proposed, it could add £41.5bn to the UK economy and create a further 678k jobs by 2025.
But there are specific things that founders and investors will likely be looking for.
Former chancellor Kwasi Kwarteng’s September mini-budget included some highly anticipated expansions to seed enterprise investment schemes and tax relief for angel investors. VCs and angels welcomed these proposed changes as long overdue, but it remains to be seen if they survive into the new government’s policy folder.
Another question for the UK’s tech community will be the ecosystem’s ability to attract international talent and equip people in the UK with the digital skills the industry needs. The UK is painfully short on tech talent.
News that the government had put a key contract with startup organisation Tech Nation up for grabs earlier this year — and that it would be given to retail bank Barclays — spooked investors and founders. Tech Nation looks after the UK’s global tech talent visa, which is unaffected by the contract switch.
The other support that the nation’s innovators need is in commercialising research and encouraging science-based startups. Earlier this year, the UK government set up a new Advanced Research and Invention Agency. Matt Clifford of Entrepreneur First was named chairman.
Amy Lewin is Sifted’s editor and Eleanor Warnock is Sifted’s deputy editor. They host The Sifted Podcast and write Up Round, a weekly newsletter on VC.