This week, Chancellor Rachel Reeves delivered her much-anticipated Spending Review, setting out the Government’s strategic priorities with a 2.3% real-terms increase in total departmental budgets. From healthcare to national security, the Review touches virtually every corner of public policy, but does it deliver the coherent vision Britain’s businesses need to deliver growth?
No policy announcement – or newsletter for that matter – is complete nowadays without mentioning AI. As Anastasia Bektimirova, our Head of Science and Technology, responded:
“It’s excellent to see £2 billion allocated to deliver the AI Opportunities Action Plan, including up to £500 million for the new UK Sovereign AI Unit – which we’ve already seen in action with [the] announced investment in OpenBind, which will help position the UK as the go-to destination for AI-powered drug design by addressing one of the field’s biggest bottlenecks.
“Coupled with the additional £1 billion for the AI Research Resource announced earlier this week, more of such ambitious endeavours will help the UK gain strategic advantage in critical areas of science and technology.”
Another impediment to growth that we’ve long drawn attention to is the cost of energy. The decision to invest in both advanced modular reactors and fusion technology thus signals serious intent towards making Britain more competitive, particularly in energy-intensive sectors. As Eamonn Ives, our Research Director, notes:
“Economic growth and energy abundance go hand in hand. It’s therefore extremely welcome to see the Government resolutely commit to a nuclear power renaissance in Britain – pledging investment in innovative advanced modular reactors and fusion reactors alike.”
However, investment alone won’t deliver results. As Eamonn emphasises, “funding can only go as far as we allow it. Alongside this investment, the Government must also rationalise the regulatory landscape that nuclear developers face, so that the private sector can be the driving force behind the rollout of new nuclear assets.” As luck would have it, these are all issues that he unpacked in his recent Small Wonders report.
Somewhat less high-tech but just as important was the Review’s focus on transport infrastructure – recognising a fundamental economic truth about connectivity and growth. As Eamonn states, “deep and interconnected labour markets are the lifeblood of dynamic economies.” It’s why agglomeration is a major pillar of our policy priorities. As he goes on to say:
“When workers can better match their skills with employers, or when innovators can exchange ideas more easily, productivity booms. By investing in new transport infrastructure across the North and between Oxford, Milton Keynes and Cambridge, agglomerative forces will be strengthened.”
The success of these investments, however, depends on execution. Eamonn warns that “to ensure public money is spent effectively, the Government should double down on its planning reforms that will prevent blockers from driving up costs and delaying construction.”
Perhaps the most concerning aspect of the Review is the contradiction between stated ambitions and actual policy. While the Government commits to supporting opportunities for top international talent, this sits uncomfortably alongside restrictive immigration policies outlined in the Immigration White Paper.
Eamonn responds, “the Government says it will support new opportunities for top talent to enter the country. Yet this is diametrically opposed to other plans set out in the Immigration White Paper, which will render Britain’s economy less attractive and more difficult for the world’s brightest minds to contribute towards.”
This contradiction undermines Britain’s competitive position. “The Government knows that overseas talent is critical for our entrepreneurial ecosystem to succeed, but its stance is increasingly contradictory – with Britain’s status as an enabling place to build losing its lustre as a result.”
Sober Reading
I don’t want to dampen the optimism following the successes of SXSW London and London Tech Week, but the latest Global Startup Ecosystem Report 2025 report makes for sober reading.
For the first time since 2019, London has slipped to third below New York in its highly respected Global Startup Ecosystem ranking (no prizes for guessing number one). This isn’t just a London thing, nor a UK thing, but a European thing. The report argues that the global startup landscape is undergoing its most dramatic shake-up in years.
Contract Helper
The Office of the Small Business Commissioner (OSBC) has asked us to share a Guide to Creating a Contract which aims to help small businesses write and negotiate clear, simple contracts between them and their suppliers.
The guide is designed to be as comprehensible as possible. The OSBC can’t provide a template contract to accompany it for legal reasons, but the World Commerce and Contracting Association and its charitable Foundation, who collaborated on this resource, have examples on their website.
Bull Market
I’m delighted to announce that Partners Wealth Management is the latest company to join us as a Corporate Partner. David Bull, who is a Partner in the firm, will become an Adviser.
Our Corporate Partners, like David, speak with entrepreneurs on a daily basis, so are vital for keeping us updated on their challenges. But that learning goes both ways. As David says:
“I need to understand the challenges my clients are facing in order to better support them in building their long-term personal financial and lifestyle goals. The Entrepreneurs Network creates a forum for the wealth creators of the UK to address their challenges to success.”
If you’re keen to join our growing band of brothers and sisters, driven to make the UK the best place to start and grow a business, let me know.