🚙 Eamonn Ives, Research Director
Last week, Waymo formally announced that from 2026 it would be offering Londoners the opportunity to be whisked around the capital in one of their autonomous vehicles. As someone who made a point of hailing a Waymo as soon as I possibly could when I last visited San Francisco, I could not be happier with this news.
In our very first instalment of Three Big Ideas, I explained how autonomous vehicles represent a much safer form of driving – “[t]he computers that control them don’t get aggressive, tired or drunk” – and how they could also pave the way to a radically more efficient transport network. But the recent announcement also gives me hope in another dimension.
When innovation goes right it doesn’t just bestow society with snazzy new goods and services. It also instils in people a technophilic mindset that a better world is possible. When things that were once impossible become an ordinary part of daily life, it forces us to wonder what other unimaginable advances stand to be made. In short, innovation – like entrepreneurship – is contagious.
With that in mind, the next logical question is what can be done to increase innovation’s virality. Of course, there are the obvious things – like governments ensuring regulations allow experimentation, or enabling immigrants who likely have novel perspectives to move easily to new countries.
Then there are the more overlooked things. In our report Blueprint for a New Great Exhibition, we made the case for reviving the 1851 Great Exhibition, which showcased the latest inventions from around the world, facilitating learning – and stimulating competition among nations to raise their respective games. A revamped Great Exhibition might be a chance for innovators to convene and demonstrate the latest in lab-grown foods, breakthrough materials, medical nanobots, and, yes, autonomous vehicles.
If innovation is a cycle that feeds on belief, then just making it more visible is one of the best forms of progress policy we have. Simply put, the future feels closer when it drives past you.
💫 Bella Rhodes, Policy Lead, Startup Coalition
Over at Startup Coalition, we have just launched a report looking at the Enterprise Management Incentive (EMI) scheme. EMI offers tax-advantaged share options to help startups compete with corporate giants for top talent. When you can’t match Big Tech salaries, equity is essential.
Our report found that EMI works brilliantly – until it doesn’t. Ninety-two per cent of employers say it meaningfully motivates employees, 82% say it helps attract talent they’d otherwise struggle to hire, and 85% believe staff motivation would suffer if options became less attractive. But the scheme is breaking at precisely the wrong moments.
Companies raising funding rounds – averaging £23 million for growth-stage deals and £31.5 million for AI firms – routinely breach EMI’s outdated £30 million asset cap in a single go. This creates a brutal tax cliff: they don’t graduate to another scheme, they’re simply locked out. While alternatives like a Company Share Option Plan exist, they’re not always suitable substitutes, leaving successful scaleups in a policy no-man’s land: too large for EMI, but not yet at scale to rely purely on cash compensation.
Meanwhile, with companies staying private longer (now 10-12 years to IPO), early employees are forced to either lose their options or face punitive tax treatment when the 10-year exercise window expires. Changes to HMRC guidance applied retroactively now prevent boards from extending opportunities for employees to access liquidity through secondary transactions. Long-serving employees are forced to choose between exercising early (paying huge upfront tax bills) or leaving the company. Their employers can’t help without jeopardising the entire scheme.
One of our key recommendations is an EMI Growth scheme. Rather than leaving successful companies stranded when they outgrow EMI, we should create a smooth graduation path – an ‘EMI Growth’ tier with higher thresholds (we suggest £500 million assets and 2,500 employees) that maintains tax advantages for scaling firms. This prevents companies scrambling to restructure equity compensation while closing critical hires, keeping Britain competitive when it matters most.
🔌 Ed Hezlet, Head of Energy, Centre for British Progress
Energy policy in the UK is facing a conundrum. Decarbonisation efforts to date have largely focused on cleaning up electricity generation, which accounted for nearly a quarter of Britain’s territorial emissions in 2004. Fast forward to 2024, and absolute emissions from the electricity sector had fallen by 78%, to just 10% of total emissions.
Unfortunately, the UK now has some of the highest electricity prices in the world. In 2024, the UK had the second-highest domestic electricity prices in the IEA and topped the charts with respect to industrial electricity costs. This is not only a barrier to growth in the UK but also stands in the way of consumers and businesses adopting decarbonising technologies like heat pumps and electric vehicles.
There is no silver bullet for solving this problem – electricity bills have become a complex array of different policy costs that have been layered up over time. Whilst some of these costs could be moved to general taxation, scope is limited with the UK’s already tight fiscal position.
One small lever to help the situation would be removing the Carbon Price Support (CPS), the UK’s second carbon cost for electricity generators, which sits alongside the UK Emissions Trading Scheme.
The CPS adds a carbon tax of £18 per tonne of carbon dioxide, which increases wholesale electricity prices by around £6.60 per megawatt-hour whenever a gas power station is the marginal generator in the wholesale electricity market.
Our research indicates that this tax increased electricity costs by around £1.6 billion in 2024, whilst only raising around £440 million in tax receipts for the government.
Whilst it is a small start, the UK needs to focus on reducing its electricity costs to more competitive levels – for the sake of households, businesses and the environment.