UK Election Outcome to Impact on Tech Start-up Sector
The result of the May 7 general election in the UK will determine the country’s tech start-up sector significantly, with the political parties contending for office making various pledges.
“It’s clear that the main parties are keen to get the support of the UK start-up community,” says Elizabeth Varley, chief executive officer (CEO) and co-founder of TechHub, which provides working space for new tech businesses.
“A majority of the parties have pledged to boost funding for entrepreneurs in some shape or form, whether that’s through private investment or lending schemes. To enable these start-ups to grow, the next government needs to help enable old institutions like banks to work with early-stage companies that are inherently riskier propositions.”
“The [ruling] Conservative party is pledging to expand on its small business funding initiatives such as the British Business Bank and will retain the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) in order to encourage investors to back new businesses. It also plans to reduce the cost of lending to small businesses.
“Labour intends to create a British Investment Bank to lend money to new and growing businesses, which will make it easier to start and grow a business.
“All funds will be raised from the planned increase in the licence fees for the mobile phone spectrum – estimated to be up to £1bn in the next Parliament. The Green Party also plans to introduce a network of local community banks to provide a new source of finance for small businesses.
“Additionally, when it comes to funding, the Conservatives have even gone as far as to vow to make Britain the technology Centre of Europe by trebling the Start-Up Loans programme providing 75,000 entrepreneurs with the chance to borrow money to set up their own business. However, I think it’s safe to say that London is already the technology centre of Europe.
“A booming tech start-up community already exists within the UK and as well as increased funding these start-ups need further support such as a reduction in regulations and also the necessary advice and support to enable them to grow.”
“Each of the parties are proposing new regulations to reduce the burden of red tape on businesses with Conservatives introducing a ‘one in one out’ rule when it comes to new regulations and Labour proposing the introduction of Small Business Administration (SBA) body to cut unnecessary regulations.
Additionally, both Conservatives and Liberal Democrats are looking to open up government procurement. The Conservatives are claiming they have surpassed their goal of 25% of government contracts going to smaller firms, although much of this is still ‘indirect’ spending via subcontractors. Meanwhile the Liberal Democrats are pushing for a third of contracts to go to small and medium sized businesses. Interestingly, Conservatives have also outlined plans to build a ‘network of business mentors’ to support start-ups.”