June marked a milestone moment for UK tech. At London Tech Week, the prime minister delivered his first major address backing the sector, underscoring the government’s ambition for Britain to lead in the global innovation race.
Announcements followed thick and fast – from the long-awaited Industrial Strategy, to a national push on skills.
One year into forming a government, how has Labour fared in enabling a truly tech-led economy? Here’s a look at what’s been delivered – and what areas still need attention.
Emerging Tech
Grade: A – Laying the groundwork for long-term leadership
Quantum, semiconductors and AI are defining the next wave of global tech, and the UK has signalled it wants to be at the forefront.
The Industrial Strategy set out serious commitments: £670m into quantum computing, a 10-year funding package for the National Quantum Computing Centre, and the establishment of a National Semiconductor Centre with an initial £19m. Most notably, £1bn will go toward supporting deep tech startups and scaleups, alongside a new £500m Sovereign AI Fund to boost homegrown AI development.
The prime minister introduced the AI Action Plan back in January, which featured 50 recommendations for action.
These are big, strategic moves – and they’ve been a long time coming. After years of calls from industry, we now have the frameworks to compete with global peers, which is great news.
Infrastructure
Grade: B – Solid foundations, but still catching up
Jensen Huang’s message at London Tech Week was stark: the UK is “the largest AI ecosystem in the world without its own infrastructure.” That’s an important signal the UK can’t ignore.
Labour’s Industrial Strategy tackled significant parts of this head-on. The announcement of AI Growth Zones and the supercomputer investment in Edinburgh are crucial steps. Add in energy cost reductions, planning reform, and faster grid connections for key sectors – these are important wins that remove longstanding friction for UK tech firms.
But infrastructure is a marathon, not a sprint – and while the ambition is there, what matters now is execution.
Investment
Grade: B– – Progress on foreign capital, but domestic gaps remain
Global tech players are still investing in Britain – and that’s a credit to the UK’s talent, regulatory strengths and innovation culture. Recent wins include Liquidity’s £1.5bn commitment to UK AI, while the Mansion House Accord marked a major domestic milestone, with pension funds agreeing to increase allocations into UK growth-stage firms.
However, key systemic issues persist. Many UK tech companies believe there are better opportunities to scale overseas, particularly in the US, where there is a depth of scaling capital. The British Business Bank via British Growth Partnership is working to address this gap, but the rest of the world is moving forward at a very fast pace, so this gap needs to be closed quickly.
It was great to see EIS and SEIS getting renewed by the Government, but there are problems and frustrations with R&D Tax Credits, which needs to be addressed.
The decision in the last Autumn Statement to raise Capital Gains Tax – from 10% to 18%, and from 20% to 24% – was a step in the wrong direction. We must ensure that founders, angel investors and VCs are incentivised to build and back innovation in Britain.
Talent and Skills
Grade: B– – A clear vision, but some mixed signals and effective implementation is critical
The UK’s skills gap has been a stubborn barrier to tech growth for years. The recent National Skills Drive is a strong start – future-proofing the workforce and aligning education with fast-moving industry needs.
The government’s ‘TechFirst’ partnership with Google, NVIDIA, Microsoft and others is an important initiative to get British workers better skilled for digital and AI. Combining private sector capability with public ambition is the right formula.
But while the £54m Global Talent Fund and visa reforms under the Global Talent Taskforce are welcome, they come alongside the unhelpful negative messaging in last month’s Immigration White Paper. Restrictive rhetoric damages the UK’s global reputation – and risks undermining ‘soft power’ efforts to attract the very talent we need to drive knowledge transfer, insights and entrepreneurship.
Overall Grade: B – Foundations are in place, but action is what counts
Tech must remain at the heart of the UK’s growth strategy – and Labour’s first year shows that they understand this. The right signals have been sent, and foundational policies are taking shape.
But rhetoric and strategy alone won’t deliver economic growth – implementation and some ‘quick wins’ will be important to let the nation know that the policies are achieving results.
The UK needs sustained follow-through, sharper incentives for innovation, and clear support for the talent, capital and infrastructure that powers tech.
The UK Tech sector is viewed as world-leading, and this has been achieved in a relatively short amount of time. The Government clearly sees tech as a key economic driver and has been putting initiatives in place to ensure that the UK maintains a healthy leadership position.
The next two to three years are critical to strengthen this foundation and ensure that the nation continues to ‘punch above its weight’ in tech.
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