In last week’s Autumn Statement, Chancellor of the Exchequer Jeremy Hunt outlined several key priorities likely to influence the UK fintech landscape.
One of the major points of focus is Hunt’s ambition to transform the UK into the world’s next Silicon Valley. He also announced upcoming changes to EU legislation concerning financial services and digital technologies, including modifications to GDPR.
A significant development mentioned in the Statement pertains to the Digital Markets Unit (DMU), part of the Competition and Markets Authority (CMA). The government plans to introduce the Digital Markets, Competition and Consumer Bill during the next parliamentary session, aimed at empowering the DMU further. According to the Statement, these new powers are intended to “foster more competitive digital markets, streamline decision-making related to competition, update merger and fine thresholds, and protect consumers from issues like ‘subscription traps’ and fraudulent online reviews.”
Additionally, Hunt requested Chief Scientific Adviser Sir Patrick Vallance to spearhead initiatives aimed at enhancing regulations to support the safe and swift introduction of emerging technologies.
The announcement also highlighted the digital infrastructure initiative, Gigabit, which aspires to provide 85% of the UK with gigabit-capable broadband coverage by 2025 and nationwide access by 2030. This move is expected to facilitate economic growth and enhance productivity across the country.
Commenting on the Autumn Statement, Bruce Macfarlane, managing partner at MMC Ventures, noted that the government’s vision for the UK emphasizes science, innovation, and technology. He welcomed the Chancellor’s commitment to maintaining and increasing the Research & Development budget by 2025, though he expressed a desire for further details to boost confidence in the government’s growth strategy.
As outlined in the Statement, starting from April 1, 2023, the Research and Development Expenditure Credit (RDEC) rate will rise from 13% to 20%, while the additional deduction for small and medium-sized enterprises (SMEs) will decrease from 130% to 86%, and the SME credit rate will drop from 14.5% to 10%. Hunt told Parliament that he aims to protect the entire research budget and increase public funding for R&D to £20 billion by 2024-2025, as part of the effort to position the UK as a science superpower.
Hunt emphasized the government’s intention to merge the UK’s strengths in technology and science with its robust financial services sector to achieve the goal of becoming the next Silicon Valley.
Khalid Talukder, co-founder of DKK Partners, remarked that while recognizing the necessity of balancing the national budget, the government must also acknowledge the need for ongoing business support to foster long-term economic growth.
Dr. Henry Balani, head of industry and regulatory affairs at Encompass Corporation, expressed optimism that the Chancellor’s acknowledgment of the importance of innovation and technology could drive further growth, provided that businesses, regulators, and decision-makers align effectively in pursuit of the Silicon Valley ambition.