New Labour government pledges investment in UK tech & cyber

The recent General Election has ushered in a new Labour government, raising questions about how this change will impact various sectors, especially technology and cybersecurity.

Simon Wax, a Partner in the Tech and Media team at Buzzacott, has shared insights on what tech founders might expect from this new administration.

Wax points out that although Labour's five key missions do not explicitly highlight technology, their manifesto includes numerous mentions of technological and innovative advancements. This suggests a strong commitment to integrating technology into their strategy for improving public services, increasing productivity, and revitalising the UK economy.

"All political parties have promised to make the UK a tech powerhouse," Wax commented. "Yet, the last few years have presented tech founders with serious challenges – an uncertain economic environment has hampered M&A activity, and an increasingly tough narrative on immigration has made it all but impossible to recruit the best overseas talent."

Despite concerns over a potential increase in capital gains tax under Labour, Wax believes that tech founders might find reasons to be optimistic. The new government's dedication to investing heavily in clean and environmental tech, alongside clear commitments on R&D and pledges to maintain the current rates of corporation tax and personal taxes, may offer a stable landscape for the tech sector. Furthermore, Labour's promise to secure solid trade deals in key service sectors could also bolster the industry.

Wax emphasized the importance of the forthcoming Autumn statement, remarking, "Tech founders will be watching closely to see if the government lives up to its manifesto promises."

Highlighting specific commitments, Wax mentioned the creation of a new Regulatory Innovation Office aimed at addressing various digital issues. This initiative will build on the Online Safety Act and tackle regulation for companies involved in AI and machine learning whilst banning harmful deepfake content. Labour also aims to put R&D funding cycles on a ten-year footing and streamline government procurement processes to support innovation. Additionally, the party has made promises to collaborate with startups and university spinouts to ensure they have the capital needed to scale.

Labour's technological vision extends into healthcare, with plans to digitise the NHS through the use of AI in diagnostics testing and faster approvals for medicines and new technologies. Furthermore, the establishment of a National Data Library aims to amalgamate existing research programmes to drive data-driven public services.

On another front, the increasing threat of cybercrime poses a significant challenge. Chris Dimitriadis, Global Chief Strategy Officer at ISACA, stressed the urgency for the new government to prioritise cyber resilience. He noted that cybercrime costs the UK economy an estimated GBP £250 billion in 2023—an almost tenfold increase compared to a 2011 report.

"Protecting the UK's critical infrastructure from cybercrime must continue to be a priority," stated Dimitriadis. He emphasized the importance of building on current measures, noting that 38% of cyber professionals have reported an increase in cyberattacks compared to the previous year.

To address the cybersecurity skills gap, which 62% of professionals in the field acknowledged, Dimitriadis advocated for transforming the UK Cyber Security Council into an independent, self-funded body. He suggested that this transformation could standardise qualifications and provide a clear pathway for current and prospective cybersecurity professionals to build their skills. He also recommended financial incentives for businesses to encourage employee upskilling.

Moreover, Dimitriadis discussed the establishment of a Cyber Governance Code of Practice, as recommended by the McPartland Review of Cyber Security and Economic Growth. This code would aim to enhance organisational cybersecurity and national resilience. He underscored the need to defend critical infrastructures to maintain consumer trust, suggesting that the government should implement regulatory frameworks to better protect data centres across the UK.

"Cybersecurity is not a one-off endeavor," Dimitriadis concluded. "With cross-industry cyber regulations, businesses will have no choice but to comply, thereby limiting damage to consumers and maintaining their trust."

The tech and cybersecurity sectors are poised for significant developments as they navigate the strategies and policies introduced by the new Labour government.