A week can feel like an awfully long time. Last Friday, Silicon Valley Bank (SVB) was collapsing. Following a sleep-deprived weekend for Ministers, Treasury officials, and a fair few entrepreneurs, a deal was struck with HSBC for SVB UK. Anyone reading this who helped hammer a deal together before the market opened on Monday deserves a huge pat on the back. Speed was critical – credit where credit is due.

Then we had the Spring Budget, which was very pro-business – just not for all businesses.

First and perhaps foremost, we’re big fans of full expensing, which we think will incentivise productivity-boosting investments. It’s an idea that’s been pushed by economists across the political spectrum for years – everyone from Obama’s adviser Jason Furman, to Dan Neidle (more famous for recently bringing down Nadhim Zahawi over his tax affairs), to Sam Bowman (who back in 2017 described it as “the best idea in politics you’ve never heard of”), to our 2018 report with the All-Party Parliamentary Group for Entrepreneurship. Our only criticism on this front is that Jeremy Hunt shouldn’t have limited it to three years.

Coming into the Budget, many of the country’s most innovative startups were braced for the worst on the changing tax treatment of R&D. As Eamonn Ives wrote for CapX: “For the most research-intensive businesses – those defined as firms for which R&D spending constitutes 40% or more of total expenditure – they will be able to benefit from a new higher rate of tax relief. For eligible businesses, this will return 27p in the pound on all R&D investment. Before the Budget many of Britain’s innovative startups, which plough their budgets into R&D, feared having the rug pulled from underneath them on R&D Tax Credits – so this will be an extremely welcome relief. (It must be noted, however, that this measure will provide little comfort for founders of companies that just fall short of the eligibility criteria.)”

The Chancellor’s ambition to build 12 potential Canary Wharfs across the UK is a weighty challenge. I was quoted in ConservativeHome on this: “Tax breaks and subsidies are all well and good, but critical to Canary Wharf’s success was bold planning policy – building quickly at density. In 1990 the first tower built was the 244m Canary Wharf skyscraper at One Canada Square – then Britain’s tallest building for two decades. This is the sort of ambition we need to see if this policy is going to be a success, but one that recent governments have failed to realise at scale.” As we have argued, it’s time to build.

Our research has also shown how red tape around informal care drives childcare suppliers out of the market, as does confusion around planning permission. As such, aligning staff-to-child ratios in England with Scotland is a positive and common-sense first step, but such is the scale of the problem that further reforms will also surely be necessary.

In general, it’s great to have seen the policy turn towards our agenda of entrepreneurship and innovation. However, as I wrote for Startups.co.uk, I think at the same time we (in the broadest sense of the word) need think more about what can be done to help all businesses. This isn’t about handouts and protecting businesses from necessary failure, but making sure that we have a truly dynamic economy.

Patience Please
Well below the headlines, the Chancellor announced the extension of British Patient Capital’s mandate until 2033. Across three programmes, British Patient Capital now manages assets with a total value of over £3 billion, making it the largest domestic investor into UK venture capital. A consultation on the Long-term Investment For Technology and Science (LIFTS) initiative was also announced. It aims to establish new investment vehicles to crowd-in investment from institutional investors, particularly defined contribution (DC) pension funds.

It’s great to see successive governments take this seriously. We think it’s vital too, which is why we are partnering with the CBI to investigate the problem of why the UK sees comparatively little institutional investment (from pension funds and insurers) flow into companies through equity, and science and technology startups in particular. Drop our Head of Research an email if you want to have your say.

Aria(vederci)
A byproduct of working with some of the UK’s smartest and ambitious policy experts is that at some point they will want a new challenge.

After a slew of incredible reports, covering everything from early stage investment, procurement, and competition policy, our Head of Policy Aria Babu is moving on to her next chapter. Aria also ran our Female Founders Forum, boosting the number of high growth founders, and writing three significant reports covering the disproportionate impact of Covid-19 on female founders, the state of female entrepreneurship in the high-growth sectors such as e-commerce, fintech, and greentech, and most recently a detailed survey some of female founders who have raised over £1 million in equity.

If I had to recommend one report it would be Strong Foundations, which reveals how our rigid planning system leads to expensive housing, office space and lab space, and how this impacts entrepreneurs. By placing limits on agglomeration, we see fewer of the benefits it can bring for innovation, productivity, jobs, and more.

You can follow Aria on Twitter or connect with her on LinkedIn.

We’ll soon be sharing a job description for a new role, but any smart, ambitious policy people are welcome to get in touch now to express interest, or if you know anyone who might be interested put them in touch.

Quarterly Meetings
Alongside our dinner programme, we’re planning to start hosting quarterly meetings with our Advisers. Whether you’re already an Adviser or just an admirer of our work, drop me an email if you’re keen to host us.