Rachel Reeves, Chancellor of the Exchequer, will deliver the annual Spring Statement next week, with expectations of dramatic changes to the UK government’s economic policy. Reeves is anticipated to seek a balancing act of slashing government red tape and reducing government expenditures while adopting policies attempting to boost economic growth. Any tax changes, too, will be keenly watched.
In advance of the presentation, Laurent Descout, CEO of Fintech Neo, has shared what he would like to hear from the Chancellor.
Descout says that as a Fintech company based in Barcelona but with offices in Cambridge and London, he sees firsthand how important UK universities are to the Fintech sector. They produce top talent and drive research while incubating promising early-stage firms.
“However, financial pressures on universities now pose a direct risk to the UK’s Fintech ecosystem. High-growth firms rely on a steady pipeline of graduates in AI, data science, and engineering. These skills are essential for the future of financial services. If universities struggle, so will the UK fintech sector’s ability to compete globally,” said Descout. “For the UK to maintain its strong position as a global Fintech leader, the government must commit to sustainable university funding, expanding R&D tax incentives, and strengthening support for university spinouts.”
Descout adds that the UK government must continue to support SMEs during an exceptionally difficult environment. He noted that last month alone 393 companies were forced to shut down in Wales and the UK – the largest amount since September 20224. This underlines the enormous pressure SMEs are under.
“For SMEs to not just survive but thrive, they need permanent full expensing, stable tax policies, and unhindered access to investment. The increasing rate of capital gains tax on gains qualifying for Business Asset Disposal Relief (BADR) is set to increase from 10% to 14% starting from April 6th 2025, with a further increase to 18% scheduled for April 2026. This increase could deter investors from backing high-growth SMEs and fintechs. It would make it harder for startups to scale, secure funding, and progress to IPOs or secondary share sales. Without investor confidence, the UK risks stalling its innovation pipeline just when it needs to compete on the global stage.”
The Spring Statement will be delivered next Wednesday, March 26, 2025.