The Autumn Budget will be presented next week on November 26th. Chancellor of the Exchequer Rachel Reeves has her work cut out for her as the UK is experiencing mediocre growth, sticky inflation, and high government debt. Expectations that some taxes may rise, but any shift away from the private sector to the public sector has consequences which will impact growth and investment. If items like capital gains taxes go higher, this could drive innovators away from the UK.
Slashing government expenditures can help reduce the debt burden, but this, too, will inevitably have economic reverberations, depending on what may get cut.
Laurent Descout, the CEO of Neo, says that the UK government needs to do more to support smaller businesses.
“SMEs are an integral part of the UK economy, but not enough is being done to support and help them grow. The Autumn budget needs to focus on freeing up cash for SMEs, not tightening it through tax rises,” says Descout. “Expanding schemes like the Enterprise Investment Scheme (EIS) to cover scale-ups, alongside broader R&D incentives, would give firms the funds they need to innovate, scale, and compete globally.”
Descout adds that late payments are a real issue, and smaller firms lack the ability to manage cash flow issues. Even with bigger firms pushing against plans to crack down on late payments, the government should move forward with its plan to cap payment terms at 60 days. He believes that AI can help, but only the government can ensure that payments are made on time.
Descout also sees talent as a problem, and policy should be crafted to “keep the talent conveyor belt going.”
“Government investment in universities, support for spinouts, and continued development of innovation clusters will ensure high-growth firms can access the steady flow of AI, data science, and engineering graduates they need to thrive. Building these regional ecosystems and infrastructure is key to retaining talent and maintaining the UK’s position as a global tech and fintech hub.”
Descout believes that the UK has the potential to lead Fintech and AI development, but this is contingent upon the regulatory environment, which must be agile and supportive.
“Leveraging regulatory sandboxes and innovation offices to clarify rules on technology, data, IP, and competition will give firms the confidence to innovate at scale while managing risk. A forward-looking approach to AI regulation is essential to restore business confidence and drive growth.”
