Spending Review: Reeves piles billions into tech as firms cool on UK
Chancellor Rachel Reeves bet heavy on tech and innovation in her maiden Spending Review, in a week that saw a trio of tech firms depart from the London Stock Exchange.
Reeves hiked research and development funding to a record high of £22.6bn per year by the end of the Spending Review period.
She doubled down on the government’s push to make the UK an AI superpower with a £2bn injection into the government’s AI Action Plan, overseen by tech secretary Peter Kyle.
Reeves said the tech has the potential to “solve diverse and daunting challenges” whilst boosting the jobs market.
Kyle’s department for science, innovation and technology (DSIT) was a key winner from the Spending Review, with its budget upped to £16.5bn. This marked a real terms growth rate of 2.8 per cent on real terms from 2023/24 to 2028/29.
This came as part of a package to boost home-grown talent and education, particularly in the aerospace and modern technology realm.
British Business Bank set for a boost
This also included the expansion of the financial capacity of the British Business Bank to £25.6bn.
The bank serves as the government-owned development firm, helping with personal loans for new businesses and providing lenders with a 70 per cent government-backed guarantee to support debt finance for growing businesses.
Reeves’ reach for innovation follows Prime Minister Sir Keir Starmer’s push alongside US chip maker Nvida on Monday at London tech week to make the UK an “AI maker, not an AI” taker.
But Starmer’s landmark announcement was overshadowed by a trio of tech blows to the London Stock Exchange.
A total of £6.3bn is set to be racked up in merger and acquisition transactions after London-listed Alphawave and university spinout Oxford Ionics were taken over by US tech giants.
Meanwhile, testing equiptment specialist Spectris said it was “minded to accept” a proposal from US private equity company Advent.