UK-based Tech Companies

Wednesday 11th March 2026 Westminster Hall

[Mr Clive Betts in the Chair]

11:04

[Peter Fortune (Bromley and Biggin Hill) (Con)]

I beg to move,

That this House has considered Government support for UK-based tech companies.

It is a pleasure to serve under your chairmanship, Mr Betts. I am pleased to have secured this debate.

It is hard to measure the true economic value of the technology sector in the UK, but I think we can all agree on the sector’s huge importance for economic growth, productivity and society as a whole. That importance will only grow in the future, so nurturing and supporting our domestic technology sector is vital. To be clear, as a Conservative, I believe in the importance of competition as a driver for innovation and economic growth. To have true competition, we need to challenge monopolies. If our tech sector is to thrive in the future, competition is vital; otherwise, we will see innovative firms leave the UK.

Today I will focus particularly on our domestic app ecosystem. The UK’s mobile app ecosystem generates £28 billion annually in gross value added—equivalent to nearly 1% of GDP. It also supports around 400,000 jobs: the highest number in any country in Europe. However, despite that huge contribution to our economy, app developers face significant challenges.

Apple and Google control 95% of all mobile operating systems in the UK, and the Competition and Markets Authority formally designated them with strategic market status in October 2025. That does not mean that Apple and Google just run the app stores; they have control over far more than that. Those companies can control what developers can say within apps, block developer communications with consumers, hide customer details from developers and prevent them from telling users when something is new, better or cheaper—all the while taking up to 30% of every transaction. That not only stifles the sector domestically, but pushes up prices for ordinary consumers and drives British innovation overseas. We simply cannot afford to allow such a growing industry to be lost.

[Mr Tanmanjeet Singh Dhesi (Slough) (Lab)]

I congratulate the hon. Member on securing this important debate on Government support for UK-based tech companies. My Slough constituency is a huge tech and data hub; indeed, it has the second largest concentration of data centres anywhere in the world. Does he agree that it would be an act of folly for the Government not to designate Slough as an artificial intelligence growth zone, given that £1 spent there provides a much greater return for the UK economy? We as a nation would not want to lose that.

[Peter Fortune]

I have a list of Government follies here, if the hon. Member would like me to pass them on. In all seriousness, I completely agree with him on the importance of the industry and those jobs, and I am sure that the Minister will pick that up when he responds.

To give an example of the issues with these monopolies, Amazon was forced to remove the “Buy book” button from its Kindle app on iPhones because Apple demanded a 30% cut of every e-book sale. Authors simply cannot afford to forgo that 30%. Instead, readers had to—this is absurd—close the Kindle app, log on to the Amazon system separately, complete their purchase and then reopen the Kindle app. It was only thanks to a court case in the United States that forced Apple’s hand that the “Buy book” button returned.

Spotify cannot include a “Subscribe” button in its iOS app, nor can it tell users in the app what a subscription costs or that a cheaper option exists outside the app. UK Spotify Premium subscribers have faced three price rises in two years, partly because Apple’s 30% cut has to be absorbed somewhere. Every Spotify user in the UK is paying more, and Apple’s rules are a direct reason why.

There are many similar cases in which Apple and Google are inserting themselves directly into the relationship between developers and consumers by forcing developers to use their payment systems. That takes away a consumer’s ability to choose their preferred payment method, causes greater friction when there are issues such as refunds and cancellations, and prevents consumers from properly benefiting from lower prices or discounts.

The UK’s Competition Appeal Tribunal ruled in October 2025 that Apple’s payment restrictions were neither necessary nor proportionate for security or privacy purposes. They were designed to eliminate competition. It is as simple as that. It is estimated that removing the restrictions would release £1.75 billion a year that is currently taken from UK developers and consumers, rising to over £4 billion annually by 2029. That money could go back into British engineering, creative content and the next generation of app businesses built and scaled here. We could unleash the true potential of these industries.

The ability to remove the restrictions and hand UK app developers back their rights already exists in legislation. The Digital Markets, Competition and Consumers Act 2024 gave the CMA conduct-requirement powers—the ability not just to levy fines, but to mandate specific behaviours. The CMA can end Apple’s and Google’s control over in-app communication, ensuring that developers are free to know their own customers and tell their own customers what their own product costs and where to buy it at the best price. Could the Minister outline the Government’s view on pressing the CMA to issue conduct requirements that protect competition?

Another area that we must look at is cloud computing. The UK’s digital economy is underpinned by cloud computing, but cloud has been increasingly monopolised. The CMA’s cloud services market investigation estimated that Amazon Web Services and Microsoft control 70% to 90% of the UK’s cloud computing market. That concentration poses a number of dependency risks, including operational, financial and security vulnerabilities, and restricts market innovation and customer choice.

Just months after the Government published their “Chronic risks analysis”, there were three global cloud outages within a matter of weeks. In two of those, Amazon Web Services and Microsoft were directly impacted, highlighting the risks of over-reliance on a limited number of cloud hosts. Governments, businesses, digital platforms, AI services and individuals were materially impacted by the outages, with US companies alone suffering losses of between $500 million and $650 million. Indeed, the recent CrowdStrike outage is estimated to have cost the UK economy between £1.7 billion and £2.3 billion.

Competition can be the key mitigation for the UK’s digital dependency and, again, it is the CMA that holds the levers to tackle anti-competitive conduct and address the risks of cloud concentration. I am not calling for more legislation or regulation. We do not need it. With the Digital Markets, Competition and Consumers Act, brought in by the last Conservative Government, we have already legislated for stronger digital competition, but slow implementation and weak early enforcement risk squandering a rare pro-growth and pro-SME opportunity.

Only a small number of designations have been made so far. For Google’s and Apple’s mobile ecosystems, the CMA has relied on non-binding “commitments” rather than imposing binding conduct requirements. These non-binding commitments have no clear statutory basis under the 2024 Act, carry no legal consequences if breached and are not contemplated anywhere in the CMA’s published guidance. Their use risks weakening the regime and forcing the CMA to restart enforcement if firms fail to comply, which is precisely the outcome that the last Government sought to avoid. It is also concerning that a requirement for Google to negotiate fair terms with news publishers has been pushed back by at least 12 months, despite the CMA having previously committed to use that power in the first half of this year.

The Government must reaffirm that robust digital competition enforcement is pro-growth and central to the UK’s industrial strategy. Moreover, the CMA must ensure that there is robust competition enforcement. The levers to achieve that were put there by the last Government; it just requires some political will. Fundamentally, the UK cannot build globally competitive tech firms while a handful of dominant platforms control the routes to market, search, app stores, mobile ecosystems, cloud and key AI infrastructure.

The potential for huge economic growth from our tech sector is there, but competition is key. If competition flourishes, we will see more innovation, improved services and lower costs for consumers.

[Several hon. Members rose—]

[Mr Clive Betts (in the Chair)]

Order. We have five speakers, which gives each of them between eight and 10 minutes, so that we can get the Front Benchers in after that. I call Chris Evans.

10:19

[Chris Evans (Caerphilly) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Mr Betts—and I genuinely hope you have some good news about Sheffield Wednesday in the next few days.

[Mr Clive Betts (in the Chair)]

Order. The hon. Gentleman has not been reading the media—we had some good news this morning, which has moved us forward. I just wanted to make sure everyone is up to date with the important information.

[Chris Evans]

I stand corrected, Mr Betts—I was in meetings all morning, so I have not seen the sports news yet.

For constituencies like mine, which were dependent on heavy industry, the development of high technology offers new growth opportunities that we can harness in our valley communities once again. I want to focus my comments on a company called Academii. Academii helps organisations improve their workplace training by replacing one-size-fits-all learning with streamlined content, smart delivery and measurable outcomes. It is used by major employers in the energy and utility sectors, as well as by the NHS, community health boards and international clients.

Earlier this year, the business secured £700,000 of investment from the Welsh Labour Government to further develop its platform and expand its workforce. Academii is a powerful example of what a talented team of entrepreneurs and technicians can achieve when united behind a cutting-edge idea. I firmly believe that this spirit can be fostered in our universities, which can become the powerhouse of technological change across south Wales.

Clusters in university campuses can form the basis of spin-out companies, which, under the umbrella of a higher educational institution, take groundbreaking research and transform it into a market-ready product or service. Spin-outs are widely recognised for their highly effective, lucrative and sustainable business models. Their success is driven by their dynamic and entrepreneurial culture, which involves faster decision making, greater flexibility and a higher appetite for risk taking.

[Mark Sewards (Leeds South West and Morley) (Lab)]

I recently visited the Nexus innovation hub at the University of Leeds, which does the things that my hon. Friend was just describing, with innovative spin-outs and companies genuinely innovating in really challenging areas. However, they struggle to access Government procurement because they do not have things like Cyber Essentials, but they do have the equivalent accreditation from international organisations. Does he agree that the Government should do more to recognise these accreditations, so that we do not stifle innovation?

[Chris Evans]

I am always happy to take interventions, but my hon. Friend seems to have written my speech for me, because I will develop that argument as I go along. I note he is from Leeds—Leeds pinch all of Sheffield Wednesday’s best managers, do they not, Mr Betts?

Spin-outs offer postgraduate students the sought-after opportunity to work in a start-up, allowing them to develop skills and experience outside of academia. At a time when many graduates are struggling to navigate the job market, spin-out companies can be a fantastic place to start their career. Places like Wales, Northern Ireland and the north-east have traditionally been reliant on public sector work and have a lack of entrepreneurship, but spin-out companies can remedy those problems. Young people can found these companies, and young people can work in them. Their success boosts employment, the economy and investment in higher education. In 2024 alone, spin-outs channelled a record £3.35 billion of investment into university research. Such investment not only benefits the economy but ensures that promising technologies are not abandoned due to lack of funding.

While much of this funding is awarded to spin-outs in the golden triangle of Oxford, Cambridge and London, Swansea University has bucked the trend. It has emerged as one of the UK’s leading academic institutions for generating spin-out companies, having established 58 spin-outs since 2011. Swansea’s recent successes include Ail Arian, a business that recovers silver from printed electronics, and Corryn Biotechnologies, which has designed wound dressing that mimics the natural healing process of the skin. Celtic Vascular Ltd is another Welsh spin-out that deserves recognition for its groundbreaking work. Its team of researchers has pioneered AI-driven software that detects coronary heart disease with 92% accuracy.

I am proud that Welsh universities are leading the way in generating spin-out companies and inspiring others outside the golden triangle to do the same. However, the Government must do more to support spin-out companies. The biggest challenge that academics face when spinning out is finding the financial support to bridge the initial gap from the lab to the market. The UK Government recognised that challenge in their 2024 autumn Budget, in which £40 million was allocated to early-stage spin-out companies. Although that funding is welcome, it falls short of what is needed. For context, £40 million is approximately the cost of bringing just two drug-discovery programmes from inception to their first in-human clinical trials. Yet for a share of the Government’s first £9 million tranche in 2025, UK Research and Innovation was overwhelmed with more than 2,750 expressions of interest. There is a huge gap in funding at the point when researchers want to bring their discoveries out of the lab.

UK-based investors largely avoid scale-up investments, unwilling to take risks on products that have not yet been prototyped or introduced to the market. The grants awarded by Innovate UK are simply unreliable. They reached a peak of £150 million in 2023, but the funding for spin-outs fell by 44.5% in 2024 to £83.3 million. That reflects a shift in the Government’s wider investment strategy: the allocation of research and innovation grants is becoming more targeted and selective. Early-stage spin-out companies have directly lost out to this new strategy. In January 2026, Innovate UK paused its smart grants programme, which was designed to bring original, high-impact innovations to the marketplace. In its place, a new growth catalyst programme has opened, targeted at spin-outs that are ready to scale. Grants for the scheme must be aligned with private investment, which means that eligible companies are expected to be market-ready.

It has been said that a “valley of death” has subsequently emerged between the lab and the market, which many potentially game-changing innovations fail to span. To avoid that, as my hon. Friend the Member for Leeds South West and Morley (Mark Sewards) said, they are forced to rely on the US for capital. In return, the facilities and workforce are based across the Atlantic.

Ministers have a duty to turn the tide on this issue. With better UK-based support, this country’s technology, healthcare and life sciences sectors, let alone the economy, would be emboldened and much richer. I therefore ask the Minister whether the Government will provide more financial support for projects in pre-investment phases of development, beyond the £40 million set aside in the 2024 autumn Budget. Will they allow the British Business Bank to play a key role in providing that support, given its recent expansion and its position at the heart of the Government’s growth agenda?

I do not need to tell the Minister, who is a fellow Welsh MP, that Wales is home to a wealth of talent, innovation and entrepreneurial spirit. I want to see this nation thrive, but that will happen only if the Government provide the support and investment needed to unlock its full potential. I call on them to do just that, before other states around the world do it for us.

14:48

[Mike Martin (Tunbridge Wells) (LD)]

It is an honour to serve under your chairship, Mr Betts. I congratulate the hon. Member for Bromley and Biggin Hill (Peter Fortune) on securing this important debate. We have heard from both sides of the Chamber that the British tech sector spreads into all our constituencies, so it concerns us all.

When the Government came to power, they said that their central mission was to provide growth. I posit that a key way to do that is by supporting our small and medium-sized businesses, because that is where growth comes from.

[Rachel Gilmour (Tiverton and Minehead) (LD)]

Does my hon. Friend share my view that, although we can be rightly proud of having the third most valuable tech ecosystem in the world, we cannot be complacent, especially amid increasing international uncertainty? Shearwell Data in my constituency is exactly the sort of business that he refers to. A family-run business, founded by Richard Webber in 1992, it now exports livestock management systems internationally. Mr Webber is a true local champion: he not only runs that fantastic family businesses, but works at the heart of our community in Wheddon Cross. Does my hon. Friend agree that the flight of UK tech companies to other markets such as the United States shows that we must do more to ensure British companies can start, stay and scale here?

[Mike Martin]

I thank my hon. Friend for her comprehensive intervention, which speaks to exactly the issues that I will raise.

The key example is DeepMind, which was the world-leading AI company. We, the Brits, failed to create the ecosystem, funding and risk-taking capital to enable it to scale fully. It was then bought by Google, and now the British Government contract with Google rather than with DeepMind. That is exactly my fear: even though we are the world’s third AI power, that could move away from us very quickly if we do not create the right ecosystem to support our tech firms.

If this Government are serious about supporting growth, we need to look at small and medium-sized enterprises. It will not surprise hon. Members that I have some examples from my Tunbridge Wells constituency. First, Capital Web develops AI software to help businesses to improve productivity. That is on the application side of AI; we are never going to compete on the frontier model side of AI, but the UK can certainly compete on how we implement those frontier models to work cases. I will also give a bit more detail about Adzuna, a firm based in Tunbridge Wells that helps people to find jobs.

The problem in the UK is one of scaling up. We often have support for businesses that are very small. We might have research and development tax credits or innovation grants, or we might help them to spin directly out of universities. However, what just does not happen in the UK is moving them on from the position where they have a concept and patent and are perhaps ready to scale rapidly. Those firms are left to go abroad, be taken over, or perhaps wither and see the market move on and eclipse them. That is the real danger.

[Dan Aldridge (Weston-super-Mare) (Lab)]

I held a roundtable in my constituency with the Startup Coalition just two weeks ago. We found that one of the biggest barriers was not an absence of talent or expertise in my town, but a poverty of access to information, advice and guidance. No one had heard of small business start-up loans, the £500 to £25,000 Government-backed loans, which are really critical. That was one of the things people critically needed. That is a big issue. I would ask the Minister how we improve communication to places such as Weston-super-Mare.

[Mike Martin]

That is an excellent point. It is very much something that the Government can do, because they understand where capital can be found and how to create the legal and regulatory ecosystem that enables these companies to thrive.

Let me touch briefly on access to capital—I am thinking of slightly larger amounts than those the hon. Gentleman just mentioned. Pension funds are a huge source of capital. In the UK, trillions are under management in our pension funds. This is something that Canada does very well. Canada’s pension funds operate almost like specialist investors, pumping billions of dollars into AI, infrastructure and software. To pick another example that is dear to my constituency, South East Water, which many hon. Members will have seen me rail against, is 25% owned by NatWest pensions—our favourite cuddly UK bank—which makes its money by selling debt to South East Water at a rate of 10% interest. That is not pension fund investment that is driving growth in the UK. We must do better. We must think about how we can push and guide our pension funds, and all those millions that are under investment, to invest in growth sectors in the UK, rather than going abroad.

Let me turn to reforming public procurement. At the worst end of the spectrum is probably the Ministry of Defence, where it takes six years from first contact to signing a contract. That is just to sign the contract, not to deliver the piece of military hardware and test it or have it in service. The stories out of MOD procurement would not be out of place in an episode of “The Thick of It”.

That is the worst case, but then there is the Department for Work and Pensions. Andrew in my constituency founded Adzuna, which is effectively a super-duper job search thing that uses AI to match people’s profiles to the skills needed and so on. It took him two and a half years from approaching the DWP to signing a contract. Andrew started out with a laptop at his kitchen table, and businesses that size cannot wait two and a half years. Cash is king—and they will either have gone out of business or decided to go somewhere else by the time that contract is offered.

Whether in defence, where people actually need to contract much more quickly because of the pace of technological change, or Government, who actually need an effective job search tool on their websites, these timescales need to be compressed. In that way the Government will open themselves up much more to small firms instead of just the big firms that are able to take two and a half years on a punt for a contract with the DWP.

To sum up, there are a number of things that the Government could do around information sharing—I thank the hon. Member for Weston-super-Mare (Dan Aldridge) for making that point—and access to capital, particularly encouraging pension funds to invest. They should also look at procurement and focusing that on small businesses, because small businesses are the ones that deliver growth. That is where we get growth in our economy—much more so than from big businesses. The Government have a huge set of levers to pull, so I implore the Minister, “Could we perhaps start pulling them?”. I look forward to his remarks.

14:56

[Alison Taylor (Paisley and Renfrewshire North) (Lab)]

It is a pleasure to serve under your chairship today, Mr Betts. I thank the hon. Member for Bromley and Biggin Hill (Peter Fortune) for securing such an important debate—a debate that is of significance to my constituency and the role it plays in supporting UK-based tech companies.

In my former career as a chartered surveyor, I worked on a project in the constituency to create an innovation zone around Glasgow international airport, funded in part by the UK Government’s city deal. The Chancellor has now committed to further support with £30 million of direct investment from the UK Government to expand that project. This Labour Government’s commitment to continue to invest directly in such long-term initiatives is most welcome, and it has made a huge impact on the economic and upskilling opportunities for generations of residents in my constituency.

The zone, which includes the Advanced Manufacturing Innovation District Scotland—also known as AMIDS—would not be there without UK Government support, which has helped to fund large infrastructure works including two new bridges, land reclamation, decontamination and active travel routes. All that preparatory construction work paved the way for the iconic anchor building, the National Manufacturing Institute Scotland, to be completed. Its completion has already acted as a catalyst for future investment. It is helping to make tech companies more productive, resilient and sustainable. It also pioneers and harnesses AI to drive smarter, data-led production, turning breakthrough ideas and inventions into high-impact industrial products. The National Manufacturing Institute Scotland is also a leader in the circular economy and in recycling industrial products such as wind turbine blades.

Working in conjunction with academia from across Scotland and the local West College Scotland, that collaboration drives innovation and new technologies. The new innovation zone supports emerging sectors such as photonics, which is important for medical imaging, solar power and high-speed telecoms. Advanced manufacturing in the zone will also support sectors such as net zero shipping, energy-efficient aerospace, the circular economy and green jobs. It is a model for how the Government can drive growth and support innovation in the tech sector.

I will conclude by thanking the Government for undertaking recently to identify barriers to growth, including considering further measures to support access to finance, which is crucial for the emerging tech sector. All those measures are most welcome.

15:00

[Jim Shannon (Strangford) (DUP)]

As always, it is a real pleasure to serve under your chairship, Mr Betts; thank you for all you do for us in relation to Westminster Hall. I also thank the hon. Member for Bromley and Biggin Hill (Peter Fortune) for raising this issue and thereby giving us all an opportunity to participate in this debate—and it is always good to see the Minister in his place. I wish him well in the role that he plays and we very much look forward to hearing his response to the debate.

I always say good things about Northern Ireland, but today I want to talk about the things that I believe put us at the top of the tree when it comes to cyber-security. Northern Ireland has become the cyber-security centre of Europe—it is increasingly possible that it might even be the global cyber-security centre—but that situation did not simply arise out of nowhere. There has been a dedicated focus on investing in the sector, and on training young people to think differently and to become involved in it.

My parliamentary aide attended a grammar school that typically focused on maths, English language and science, yet she recalls a careers day when an adviser from Queen’s University in Belfast came in and advised her and her classmates to consider tech and computer science, saying that those would be the future of employment and job security in Northern Ireland. That was back in the year 2000. How right and how prophetic that university adviser was.

Sometimes along life’s way we meet people who will have an incredible influence on our lives; we all have those people, when we look back. That university adviser was one of those people; he had a vision, and in particular a vision for young people. Many of the people he taught are now in that category themselves, in that department or that section.

[Dan Aldridge]

I just want to pay tribute to a number of lecturers at the universities in Northern Ireland. I used to work for the British Computer Society and the Northern Ireland branch was phenomenal. If the hon. Gentleman has not yet made contact with that branch, to speak to it about its cyber-security work in Northern Ireland, it would be a fantastic group of people for him to connect with.

[Jim Shannon]

I thank the hon. Gentleman very much for that intervention; it is always good to get an intervention that reinforces the point of view that I am putting forward. Obviously, he has a personal knowledge of this issue and we thank him for that, too.

Due to the dedication and focus of universities in Northern Ireland, in particular Queen’s University in Belfast, cyber-security quickly became a focal point for careers. Subsequently, Northern Ireland, because of its unique combination of world-class academic research, a high concentration of global firms and a stable, highly skilled talent pipeline, has developed a well-established reputation in this field.

However, we all know that we can never rest on our achievements or laurels, but must continue to strive for more. That is why it is imperative that funding exists to keep pace with and even outstrip our competitors in providing skilled workers and innovation, supported by world-leading university structures. Northern Ireland leads the way in that regard and it is good that it does so.

The Centre for Secure Information Technologies at Queen’s University in Belfast is the primary driver of world-class academic research, and we need to retain and enhance funding for that research to continue. The centre is the UK’s innovation and knowledge centre for cyber-security and is the largest of its kind in Europe, recognised by the National Cyber Security Centre as an academic centre of excellence in both research and education. Those are big plaudits for Queen’s University and its work.

Belfast has consistently ranked as the No.1 global destination for US-based cyber-security foreign direct investment, with more than 100 cyber-security businesses and teams located within just three miles of the city centre, hosting European or global security operations for firms including Rapid7, Proofpoint, IBM Security, Microsoft, Nvidia and Nihon Cyber Defence, as well as international financial giants such as Aflac, Allstate and Citi, which has established its global cyber-security operations centre in Belfast. Again, that is an indication of the confidence across the world in Belfast, in Queen’s University and in Northern Ireland.

We have the highest percentage of qualified IT professionals in the United Kingdom and Ireland, with more than 77% holding degree-level qualifications. Added to that is the fact that operating costs in Northern Ireland are approximately 40% to 55% lower than in other parts of western Europe. With a 40% reduction in typical salary costs compared with London, it is easy to see the attraction. The money that has been invested in growing this space has had a real return for the local economy—plenty of high-paying jobs and opportunity.

The sector generates more than £258 million in direct gross value added for the local economy annually, and supports almost 2,800 roles across more than 120 companies, with the average advertised salary in the sector exceeding £53,000, which is significantly higher than the regional private sector median. The recent £3 million investment in the Centre for Secure Information Technologies is estimated to unlock some £10.7 million in broader economic impact across the United Kingdom.

I am not quite sure if the Minister, in his role, has had a chance to go to Northern Ireland? If he has not, I encourage him to go. I think he would be impressed. Everyone knows that I am in favour of support for the Union; I think we are all better together. We have no Scottish nationalists or Plaid Cymru here to say otherwise. In this great United Kingdom of Great Britain and Northern Ireland, we all help each other, and there are great advantages to being a part of this, the best Union in the world.

If the Minister gets the opportunity to go, he would be impressed. He may tell me he has been there. If he has, that is fantastic news. Investing in growth in this sector is a must. I look to the Minister to ensure that Northern Ireland sees her share of investment, because we have proven already that we can not only provide the goods, but do so much more.

15:06

[Edward Morello (West Dorset) (LD)]

It is an honour to serve under your chairship, Mr Betts. I congratulate the hon. Member for Bromley and Biggin Hill (Peter Fortune) on securing this important debate. I suspect that, at this point, I am in danger of labouring the points already made by other hon. Members, but I will persist. Perhaps it is a sign that we all know what needs to happen. I am sure the Minister will speak to those issues.

The UK tech sector employs more than 1.7 million people and contributes more than £150 billion to the UK economy. Our technology ecosystem has created more than 185 unicorn companies, which are start-up companies valued at more than £1 billion. I suspect that, at the end of this debate, a word cloud would have the word “ecosystem” as the largest word, but there is good reason for that.

Innovation does not happen on its own; it requires the right conditions, such as access to funding, clear regulation, market confidence, skilled workers and a Government who understand the importance of helping companies grow. That is particularly important for small and medium-sized businesses, which form the backbone of the UK economy. In the UK, there were 5.7 million SMEs, including 5.4 million microbusinesses, in 2025. Those companies often develop some of the most exciting ideas, but they also face the greatest challenges when trying to scale up.

One area where the UK has a huge opportunity is climate technology. As the chair of the all-party parliamentary group on ClimateTech, and having spent nearly a decade working in renewable energy finance before entering Parliament, I have seen how much potential this sector has. Between now and 2050, the world will need to remove 165 billion tonnes of carbon dioxide from the atmosphere, with annual removals reaching about 10 billion tonnes a year by the mid-century if we are to limit global warming to between 1.5°C and 2°C. The Intergovernmental Panel on Climate Change has made it clear that without carbon-removal technologies, those goals will not be met.

[Alison Taylor]

The hon. Member mentions a specific sector of the tech economy. Does he agree that tech companies do best when they are clustered together, particularly in innovation zones, so that they can share emerging knowledge and technologies, and link in with academia?

[Edward Morello]

I certainly agree that, if we want to become a market or world leader in a particular technology space, it is vital that we channel funding and support into those areas where we have the most opportunity and a competitive advantage.

Climate technology is not only an environmental priority, but a huge economic opportunity to lead a sector the world will need for decades to come. The UK’s greenhouse gas removal sector alone is now valued at £1.2 billion, with investment increasing by more than 39% in 2024—faster than the technology sector as a whole. According to analysis aligned with the Climate Change Committee’s seventh carbon budget, greenhouse gas removal technologies could support over 60,000 high-quality jobs in the UK by 2050. The Government have already taken some positive steps: funding for carbon capture and storage clusters, investment in innovation programmes, such as direct air capture and bioenergy carbon capture, and plans for new clean tech innovation challenges. Those are all important developments.

However, challenges remain, particularly when companies try to move from early innovation to large-scale deployment. Many climate technology companies face what is often called the valley of death. Early-stage funding can help to get ideas off the ground, but when companies reach pilot or demonstration stage, that funding often disappears. Data shows that although almost all seed-stage companies move forward, only one third successfully progress beyond series B investment. At that point, the technologies often require significant capital investment to scale, which requires the Government to project confidence to the sectors and investors. Without stronger support mechanisms, whether through the National Wealth Fund, the British Business Bank or other targeted policies, many promising technologies risk stalling before they ever reach market.

In other sectors, there is more the Government can do. A fantastic company called Sintela in Dorchester in my constituency develops advanced fibre-optic sensing systems capable of detecting movement and activity across long distances of infrastructure. The technology has applications in security, energy systems and environmental monitoring. Last year, the company secured orders from US Customs and Border Protection worth more than $90 million. That contract has now been expanded to $200 million through to 2028, which represents the largest contract globally for distributed fibre-optic sensing technology.

Small companies like Sintela can struggle to gain the same level of access to Government support and trade opportunities as larger firms. When business delegations travel abroad with Ministers or during state visits, the companies included are often the same large multinational businesses, but SMEs are often where some of the most exciting innovation is happening. If we want to support British tech companies properly, we must also ensure that small and medium-sized firms are included in trade missions, international delegations and export promotion.

The UK needs a clear long-term approach to science and technology. That includes raising research and development spending to 3.5% of GDP, investing in digital infrastructure, supporting local government capacity and ensuring that the benefits of technology are spread around the country. It also means continuing to invest in green technologies, which is essential if we are to tackle the climate crisis, while creating new industries and job opportunities. The UK has many of the ingredients needed for success: world-class universities, strong research institutions and an entrepreneurial technology sector. What we must do now is make sure that the environment is right for those companies to grow.

[Mr Clive Betts (in the Chair)]

We now come on to the Front Benchers. Everyone is entitled to at least 10 minutes, but I think you can work out that you have a little bit more if you want to take it.

15:13

[Victoria Collins (Harpenden and Berkhamsted) (LD)]

It is a pleasure to serve under your chairmanship, Mr Betts. I commend the hon. Member for Bromley and Biggin Hill (Peter Fortune) on securing this essential debate.

Entrepreneurship is in my blood. Both my parents ran their own businesses. My mum launched the website for her business over 15 years ago and was so tech-savvy that she had a larger Twitter following than me—and that is when it was called Twitter. As someone who went on to launch my own tech company and took part in the New Entrepreneurs Foundation, I have met so many fantastic entrepreneurs and I am so pleased that we are debating Government support for UK tech, but, boy, do we need more from the Government.

On one hand, the UK tech sector is an immense success story, and one that we should be proud of, built on the legacy of Ada Lovelace, Alan Turing and Tim Berners-Lee. My hon. Friend the Member for Tunbridge Wells (Mike Martin) mentioned DeepMind. We have the third most valuable tech ecosystem in the world at nearly £1 trillion. On the other hand, the UK tech sector is a story of frustration, stifled potential and a looming threat that great companies and ideas that are incubated here will be sold off because of a ceiling of funding.

I felt that the most powerful way to tell that story today was to amplify the voices of tech leaders themselves. These are the people who are passionate about growing world-class companies here in the UK, but their frustrations are real. It often seems more of a fight to innovate than a celebration of progress. I thank the scores of tech leaders who shared their views with me. Sadly, I cannot get them all in today, but that shows how vital this debate is. I hope that the Government will give this issue more time at some point.

I have five requests, and I ask the Minister to address as many as he can. The first one is “procurement, procurement, procurement”. Even the National Audit Office concluded that the Government’s procurement strategy actively favours large, predominantly foreign suppliers, which was brought up in a debate yesterday. Stephen Kines, the co-founder of Goldilock, an award-winning cyber-hardware company, called for the Government to buy UK products and said,

“Don’t endlessly innovate in ‘innovation theatre’ programmes only”.

I also heard from Doug Monro, the CEO of Adzuna—I am pleased to hear from the hon. Member for Tunbridge Wells that Adzuna was able to get a public contract eventually, after two and a half years. Doug urges the Government to

“buy tech and AI from British startups, not build in-house or buy from massive American companies”.

He shared the powerful message that,

“We can transform public services, cut the welfare bill, and reduce taxes if you’d only let us.”

The Government should be celebrating “made in Britain” by buying “made in Britain”. That is why the Lib Dems have called for a comprehensive public sector technology policy and investment plan and tabled digital sovereign strategy amendments to the cyber Bill. As the hon. Member for Tunbridge Wells mentioned, this is about growth.

My second call is to fix funding fast. The funding desert for scale-ups, that valley of death that we heard about, is well known, but it is worrying how normalised it has become. Ben Rose, the co-founder of Supercede, warns that many tech firms are forced to attract capital from overseas to continue growing at pace—we all know that story, unfortunately. Mark Thomas, the CEO of Appnalysis, notes that the £250,000 limit of the celebrated seed enterprise investment scheme has been eroded by inflation and rising costs to the point that it barely buys 12 months of runway. He asks that the Government look at increasing the limit of the scheme. Leo Rogers, the CEO of Curvo AI, calls for R&D tax credits to be extended to cover compute costs, which in the world of AI are really important. The hon. Member for Weston-super-Mare (Dan Aldridge) mentioned the important issue of financing smaller start-ups, which was mentioned by several entrepreneurs who contacted me. They said that would be helpful to get off the ground and to keep going. Sometimes the funding is there, but the communication of where to find it is not.

That is why the Lib Dems have called for, among other policies, an increase in R&D spending to 3.5% of GDP and better support from the National Wealth Fund and the British Business Bank to de-risk and unlock innovation. We also want a review of IR35, because that is where a lot of the workforce in tech are. The university spin-out support that the hon. Member for Caerphilly (Chris Evans) mentioned is important. The hon. Member for Tunbridge Wells talked about pension funds, and the use of those mega pension funds and where that money can go will be vital to unlocking a lot of innovation in the UK.

My third point is that we must treasure our talent. Great talent helps to grow great companies, not only by upskilling at home but by attracting experts from overseas. There are many calls to align, for example, the innovator founder visa with Innovate UK. Claudia Radu, the CEO of Circe, says that we must make sure that talent visas are easier to get. The hon. Member for Strangford (Jim Shannon) talked about the skills for the next generation, and we must ensure that our talent and workforce planning as a country is aligned with the skills we need for the future. That is why the Lib Dems believe that there needs to be a national people strategy alongside an industrial strategy, because without those skills and that talent, we cannot deliver on economic ambition.

My fourth call is to “think smart regulation”. Tech founders understand the importance of avoiding a race to the bottom, but they are often bogged down in red tape. The App Association warns that tech companies are

“overburdened with regulation, tax, and uncertainty caused by ever-changing rules”.

That is why I increasingly believe in standards and smart, outcome-focused regulation that supports innovation—and the pace it requires—and helps to build trust. The hon. Member for Bromley and Biggin Hill talked about the use of competition, which is a vital aspect of that.

The fifth call, which is also vital, is to lift up small businesses and start-ups—do not forget them. Not only are SMEs and start-ups the backbone of our economy, but all scale-ups started there; several were mentioned today. Karen Atkinson, the CEO of Mediaholix, says,

“I don’t feel that there is any support for small companies. It feels like the government are focusing on the big companies like Meta and Google, which really doesn’t benefit this country in the long run. Quick wins and vanity rather than a true understanding of what it takes and how. Overall the Government are making it exceptionally difficult for small companies to grow.”

Another founder put it more starkly, saying,

“Currently, Parliament has gamified the system against the success of British SME and micro-SME innovators.”

That support in the beginning, whether staff costs or business rates, is something that the Liberal Democrats have raised the alarm on. We call on the Government to do more. Finally, Alex from Synthesia sums it up well. He says,

“Buy software made in the UK, simplify procurement for British start-ups, and keep regulation simple and outcome-focused.”

I have a dream that we will grow our fantastic UK tech landscape. As my Friend the hon. Member for West Dorset (Edward Morello) mentioned, we can solve the biggest problems, such as climate change. We can drive that change, but more than that, we could be the country that takes in scale-ups and does not fear that the companies that incubate here will go elsewhere. Anthropic, for example, may not be welcome in the US; I hope it would be welcomed in the UK. The Government must do more to back British tech for our security, economy and the great people driving innovation in Great Britain and around the globe.

15:21

[Julia Lopez (Hornchurch and Upminster) (Con)]

It is a pleasure to serve under your chairmanship, Mr Betts. I congratulate my hon. Friend the Member for Bromley and Biggin Hill (Peter Fortune) on securing this incredibly important debate. He brings a unique blend of glamour and tech nerdery to the House. Frankly, it is something Parliament could do with much more of.

I am grateful for the valuable contributions from the hon. Members for Tunbridge Wells (Mike Martin), for Strangford (Jim Shannon), for Paisley and Renfrewshire North (Alison Taylor), for West Dorset (Edward Morello) and for Caerphilly (Chris Evans). There is a real showing of strength for the tech sector across the country, which I welcome.

As we are debating Government support for UK-based tech companies, I would like to do a bit of scene-setting. Before 2010, Britain’s digital economy was fragmented and under-developed; London’s emergence as Europe’s tech capital was not destiny; the Silicon Roundabout was only nascent; Government digital services were scattered across thousands of outdated websites; and the connection between our world-class universities and a thriving start-up ecosystem had not yet been fully realised.

In Government, the Conservatives deliberately worked with the tech sector to create an environment in which it could grow—the hon. Member for West Dorset made a point about how we need to do that—which included targeted measures on start-ups, such as the seed enterprise investment scheme. Scale-up has been mentioned as a real challenge that remains today, as has inflation in relation to the SEIS. We supported Tech City, which turned east London into a global hub for start-ups and innovation; we modernised Government services through the creation of the Government Digital Service and platforms like gov.uk; and we invested heavily in digital infrastructure, substantially expanding gigabit broadband coverage. The hon. Member for Strangford talked about how our parties like to help each other to help every corner of the United Kingdom. I remember that particular help on gigabit broadband was given to the DUP when a particular political deal was done a few years ago.

Over the following decade, that strategy paid off. Entire sectors, from fintech to artificial intelligence and from cyber-security to digital health, took root and expanded. Today, the UK digital sector generates well over £200 billion in GVA and employs 2.6 million people in its digital companies. In 2025, the combined market valuation was $1.2 trillion. It is the largest tech ecosystem in Europe, and among the largest outside the US and China. I confess that when Labour wangs on about 14 years, I say, “Yes, 14 years in which Britain built Europe’s most dynamic tech sector and the economic output of our digital sector more than doubled.”

We were also alive to the risks that a strong tech sector could pose if it was not managed correctly. That is why we introduced major legislation to shape the digital economy, and promoted competition and consumer choice. Principally, that was the Digital Markets, Competition and Consumers Act 2024, which addressed the market powers of the largest digital platforms. The principle behind that legislation was simple and profoundly Conservative. We believe that in a strong, competitive, capitalist economy, success should come from innovation, talent and providing a great product to the customer, not from gatekeeping power or monopoly control.

That brings us to the challenge at the heart of this debate, which is that in digital markets, power has been concentrated in a handful of global firms. Those firms are brilliant; they bring many tools and skills, and they bring scale. However, that scale has consequences. If we are to prevent it from being used to steamroller other businesses that may be more innovative or provide a better product to the consumer, and if we are to generate more growth and retain more value in this country rather than see it taken abroad, we need digital markets to be open and competitive.

One obvious place for intervention is the mobile app ecosystem. For many digital businesses today, the app stores operated by Apple and Google provide incredibly useful and efficient distribution platforms. However, that value comes with a toll, because it creates huge gatekeeping power for those companies. Consumers may not realise it, but that risks costing them and our economy significantly. Developers are often required to use the platform’s payment systems and to pay commissions of up to 30% on digital purchases. That is a gigantic revenue stream generated from not doing an awful lot.

Those companies may argue that they provide security and maintenance and so on, but app store commissions for Google and Apple are thought to generate up to £2 billion each in net revenue from their UK operations. That means higher prices for consumers, fewer resources for innovation, greater entrenchment and platform dominance. Then we throw up our hands and ask, “What can realistically be done? What is the alternative to those companies?” It becomes a downward spiral where we have less power to deal with these challenges.

Google and Apple’s power extends far beyond simply running app stores. They can control direct communications and what developers can say to customers, insist on particular payment platforms, prevent developers from informing users when products are cheaper elsewhere, and so on. My hon. Friend the Member for Bromley and Biggin Hill listed some critical examples, but he also mentioned companies such as Amazon. We are all familiar with the sheer power of Amazon, but if it cannot sufficiently challenge app store market power, what chance does a smaller British tech company have?

The legislative framework to address this exists in the DMCC Act, which gave the Competition and Markets Authority conduct requirement powers and allowed it to mandate specific behaviours. However, developers, competition lawyers and tech businesses tell me that they worry the CMA has gone soft, with long investigations and voluntary remedies. They believe it reflects political direction.

This exposes a wider problem with the Labour Government. We left them with the strongest tech ecosystem in Europe, but I fear they have no real plan for growth. As a result, they have a troubling reliance on big tech companies, because they are telling them they will give them big investment headlines—but that risks entrenching dependency and stifling home-grown innovation.

In their first set of returns, Labour Ministers had met big tech firms roughly 70% more often than their Conservative predecessors. That culminated in the US-UK tech deal, where there were a lot of big headlines, but I am not entirely sure what the substance was. There were interesting articles in The Guardian this week about some of those deals and I think there was a lot of circular investment going on. There was also a very interesting debate yesterday in this Chamber in which Labour MPs began to question some of what was going on; they were worrying about the dependency being created, along with the security and economic implications that brings.

Last year, the Government asked the competition watchdog to support

“the overriding national priority of…economic growth.”

However, if growth is defined as just bringing in big tech, it is predictable how the regulator will act. In February, the CMA approved voluntary commitments from Apple and Google. In fairness—I have spoken to it about this directly—it contends that this could deliver faster results. However, smaller tech firms worry that it will delay action on the substantive issue of fees.

As we highlighted in yesterday’s debate on tech sovereignty, the UK risks drifting into a position of high dependency and low resilience, where too much of our digital economy relies on infrastructure and platforms that we simply do not have any control over. That matters not just for innovation but for economic strength, consumer protection and national security.

I must stress that this is not an argument against American companies; it is an argument about competition and the dangers of its absence. In fact, courts in the US have already upheld these principles to the benefit of smaller US tech firms. We must ensure an open digital market that rewards innovation from wherever it comes and gives UK consumers and developers the same freedoms that American developers can now enjoy because of that court ruling.

The same problem exists with the CMA’s cloud inquiry, which is examining the extraordinarily important issue of market concentration. We expect a determination this month. Amazon Web Services and Microsoft dominate the cloud market, and the Government recognise this as a chronic risk. It is a red light that will be flashing more urgently after the three recent global cloud outages, not to mention the destruction of AWS data centres in the Gulf. The answer to our chronic dependency must surely come through robust competition measures. We await the CMA’s strategic market status decision with bated breath.

The rapid development of AI could, in the best-case scenario, inject real competition into these markets, with AI agents empowering the consumer. Or—this is my real worry—it could entrench the market dominance and power consolidation that we have seen in other parts of the digital economy. Will the Government and the regulator start to think about the power of agentic AI in particular? What happens when an AI starts to curate products for the consumer in ways that shut out smaller vendors from the picture, or necessitate expensive deals with the AI giants to get products into the agent’s selection?

What kind of digital economy do we want? Do we want one that is dominated by a handful of global gatekeepers, or one where a broad range of innovative companies can compete, innovate and grow on merit, delivering a diverse economy and benefits to the consumer? As Conservatives, our view is very simple: we have to give UK tech firms the tools to win. Those are: low taxes, so that innovators can invest and scale; cheap, abundant energy and high-quality digital infrastructure; access to the best global talent; and the celebration of successful people, not taxing them out of the country with envy-driven politics. It is about public procurement that backs British innovation, deeper pools of investable capital and, critically, strong competition policy that ensures that no company, no matter how large or powerful, can use its market position to drive up prices and crowd out competition. That was our approach in office, and it remains our vision for the future of Britain’s tech economy. I hope that the Minister can set out some specifics about how he, too, recognises the importance of competition in the digital sphere.

[Mr Clive Betts (in the Chair)]

Can the Minister make sure that he allows two minutes at the end for the mover to wind up?

15:32

[The Parliamentary Under-Secretary of State for Science, Innovation and Technology (Kanishka Narayan)]

It is a pleasure to serve with you in the Chair, Mr Betts. I thank the hon. Member for Bromley and Biggin Hill (Peter Fortune) for securing this important debate on Government support for UK-based tech companies. I am grateful to him and to all other hon. Members across the Chamber for their contributions. They did a sterling job of showing that the UK is truly a buzzing tech economy in every single part of the country—right across the constituencies represented here and beyond.

This Government are committed to supporting the UK’s thriving tech ecosystem. We are proud to be home to the largest tech sector in Europe, valued at nearly £1 trillion. The success of UK-based technology firms benefits us all. These are some of the fastest growing parts of the economy and are already employing millions of people. The innovations they bring are delivering major benefits to people and communities right across the country, transforming everything from the way we work to how we manage our health.

Given the luxury of time, I propose to respond to each of the points raised by hon. Members. First, I very much appreciate the points on competition policy made by the hon. Member for Bromley and Biggin Hill, and shared by the shadow Minister, the hon. Member for Hornchurch and Upminster (Julia Lopez). Of course, I am reluctant to mention any specifics about the interventions, investigations or engagements the CMA is pursuing as an independent regulator. As the shadow Minister acknowledged, the commitments that the CMA has looked at could be quicker than a full conduct requirement process.

The CMA assures the Government that it continues to monitor firm compliance. If Apple and Google fail to meet their commitments, the CMA will consider the use of statutory powers to take further action. I am conscious that it has just finished consulting, as the shadow Minister mentioned, on the first set of remedies and commitments in the light of the designations of Google, in search, and Apple and Google, in mobile platform markets. I expect very soon to hear greater detail, as well as firm timelines, on that particular point.

The virtue of the previous Government’s digital markets regime is that it is flexible and proportionate, and allows for some remedies that are quicker, and others, where this is due, that are more robust. The Government expect that the CMA will act in line with its growth and competition mandate. Those two issues overlap much more than we often give the CMA credit for.

I will briefly take the opportunity to address the shadow Minister’s history of the UK tech sector over the last 14 years. Having been in that sector through part of that time, although I very much value the growth seen in the period, I am also conscious of the particular fact that drove me into politics: over that entire period—one of the most productive periods in global technology markets—no one growing up in this country ever saw a company go from zero to the global top 10; in the United States, in that same period, people saw eight out of those top 10 companies do that. The levels of capital investment and IT in this country were materially below that of the United States. When the shadow Minister talks about the benchmark as being European growth, I fear I have to say, given that it is ambition season among Conservative Front Benchers, that she might consider joining that and raising the ambition to being a global first, not just a European-relative first.

In that period, as the hon. Member for Bromley and Biggin Hill and the shadow Minister noted, power concentrated in the cloud market in particular and right across US big tech. It was clear to me at the time that the Government were much more focused on engagement with US big tech and exactly the trend that the shadow Minister described—the power concentrated in the cloud market.

The shadow Minister’s points on agentic AI are very well made. I will make sure that we think about that deeply and engage with the CMA on the implications for agentic AI, the possibility of bundling and the limited competition that might result.

My hon. Friend the Member for Caerphilly (Chris Evans) raised the virtues of the Welsh ecosystem. It is an ecosystem that I know and deeply value personally. I particularly value my hon. Friend’s advocacy for Academii, in his constituency. His point about clusters anchored by Welsh universities is really well made. As a Government, we have committed over £1.5 billion to the question of how research translates into commercialisation. I would be happy to engage further with him on any particular instances where the Government can do more, in his constituency and beyond.

My hon. Friend the Member for Leeds South West and Morley (Mark Sewards)—the AI MP—who is no longer in his place, made a similar and important point about Leeds’s Nexus hub. I have visited Leeds in this role, and I particularly value the contributions of Leeds’s tech sector to healthcare and financial services innovation.

The hon. Member for Tunbridge Wells (Mike Martin) made a deeply important point about procurement, which was shared by the Liberal Democrat spokesperson, the hon. Member for Harpenden and Berkhamsted (Victoria Collins). I have a particular interest in defence procurement that I hope to come to more fully in my speech.

The hon. Member for Tiverton and Minehead (Rachel Gilmour), who is no longer in her place, has always been a strong champion for family businesses in the contexts of technology and agriculture. I share her ambition for UK tech businesses to start, scale and stay here.

My hon. Friend the Member for Weston-super-Mare (Dan Aldridge) has deep experience, and is also no longer in his place—despite that experience. I agree with him that although our policy is often in a good place, there is a lot more for us to do to spread awareness of that policy. I would be happy to visit him, and others, to be a small part of spreading that awareness.

I thank my hon. Friend the Member for Paisley and Renfrewshire North (Alison Taylor) for her strong advocacy for the innovation zone, both prior to and subsequent to coming to this House. She has won £38.7 million for travel support in particular and transport support more generally in that innovation zone. I will say how excited I am about the historic growth in AI investment in the wider region, which I hope will create a series of opportunities for investment, and opportunities for young people growing up in and around Glasgow to take part in it.

My hon. Friend’s mention of photonics is deeply important. Photonics is not just a British strength but an increasingly important vector for national security strength globally in the semiconductor context. I am grateful to her for championing that subsector.

In response to the hon. Member for Strangford (Jim Shannon), I note that Northern Ireland is indeed close to my heart. I grew up visiting Northern Ireland and Belfast for lots of debating competitions. He will be glad to hear that, in this role, I was back in Northern Ireland at the artificial intelligence collaboration centre at Ulster University, seeing not just the world-leading cyber capabilities in Belfast and Northern Ireland but the transformational effect that Ulster University’s investments have had on the city by creating opportunities for young people. He will also be glad to hear that just this morning, I spent time with the Secretary of State for Northern Ireland talking about our shared ambition to do even more to support the cyber and AI sectors in Northern Ireland.

The points of the hon. Member for West Dorset (Edward Morello) about energy tech were well made. I feel very strongly that our plans on clean energy are best pursued if they make the most of AI and modern technology. I think that they are pursued with a deeper sense of building public consensus if we are able to show that our clean energy values align with our prosperity aspirations around AI and technology, not just domestically but through Britain’s ability to export lessons and technology to other places, and to move the needle on global climate change.

[Edward Morello]

Shortly before the debate, the Minister said he would like to visit Weston-super-Mare and other locations. I invite him to beautiful West Dorset to visit the fibre optics company Sintela, which is one of the UK’s biggest success stories.

[Kanishka Narayan]

I have a 100% record so far of committing to visits when asked. I do not want to set too much of a precedent, but given the numbers in the room, I would be happy to take the hon. Member up on his kind offer as well.

The hon. Member also made an important point about SME representation on trade missions; on the three international visits that I have been on—to the US, South Korea and India—we have been primarily focused on SMEs. If he has recommendations of firms that would benefit from such engagement, I would be keen to take him up on them—perhaps we can discuss that in West Dorset during my visit. On word clouds, which he mentioned—I know a thing or two about word clouds—he is right about the presence of the word “ecosystem”. I would add “deeply thriving” to that, because that is what Britain’s ecosystem is.

I am delighted to hear about the history of entrepreneurship in the family of the Liberal Democrat spokesperson, and I am keen on any lessons from her mother about Twitter engagement. I also share and value her ambition for more entrepreneurship; that dream is shared across the House as well. I will come to her five points, which I think the Government are equally focused on.

I will now set out some of the things that the Government are doing. As I mentioned, we start from a position of considerable global strength. Four of the world’s top 10 universities are in the UK, and we have a proud history of technological innovation, but there is clearly more to be done. That is why, in our modern industrial strategy, we set out the first dedicated plan to support the UK’s digital and technologies sector, alongside a separate plan for life sciences. For digital and technologies, we have focused on six frontier technologies with the greatest potential to drive growth: advanced connectivity, AI, cyber-security, engineering biology, quantum and semiconductors. By 2035, we want the UK to be one of the world’s top three places to create, invest and scale up a fast-growing technology business.

Building on the industrial strategy, we went further still at the 2025 autumn Budget. We set out a package of additional support for founders and innovators to start and scale businesses here in the UK, including reforms to Government procurement, tax and our public finance institutions. As the Chancellor made clear, the Government are backing the next generation of UK tech start-ups and entrepreneurs. These plans are about making sure that we are supporting our tech companies at every stage of their development.

A great tech company starts with an idea. That is why we are making a record public investment in R&D, with spending rising to £22.6 billion by 2029-30. We have one of the most generous R&D tax credit relief systems in the entire world, and I have personally heard testament to that from a series of founders in the UK ecosystem, not least in AI, over the past few weeks.

Through our industrial strategy, we are also making sure that investment is targeted to bring innovation to market, with £7 billion for innovative companies to scale and commercialise technological and scientific breakthroughs. To ensure that the benefits are felt right across the country, we are backing high-potential innovation clusters throughout the UK through programmes such as the local innovation partnerships fund.

Brilliant ideas alone, of course, are not enough to grow a business, so we are taking a whole-of-government approach to ensure that the right conditions are in place for businesses to reach their full potential. We are expanding the British Business Bank to give high-growth tech firms access to long-term scale-up capital. We are upskilling private investors to invest in deep tech through our science and technology venture capital fellowship programme. We are ensuring that firms have access to the best skills and talent through our £187 million TechFirst skills programme and we are hoping to attract the very best minds in the world through the Government’s global talent taskforce, as well as the £54 million global talent fund.

We are not stopping there. Across the board, we are looking at how we can use the Government’s levers to support our technology ecosystem. Part of that is about infrastructure, whether that is connecting people, businesses and universities through initiatives like the Oxford-to-Cambridge growth corridor, or funding the specialist infrastructure that tech companies need through the AI research resource and engineering biology scale-up infrastructure programmes.

It is also about regulations that help, not hinder, new products to reach the market. That is why we have set up the Regulatory Innovation Office, which has invested over £12.5 million already in helping regulators to adopt new tools and approaches. Sometimes it is challenging to bring new technologies to market, so we are also reforming how the Government procure technologies to lead the way and back British SMEs.

In the autumn Budget, we announced an advance market commitment, backed with £100 million of Government funding, to buy products from novel and promising UK chip companies—an important economic as well as national security focus—once they reach a high-performance benchmark. I know that the Ministry of Defence has committed to a significant budget allocation to novel technology procurement and I am keen to ensure that the design and process for that are as compelling as the scale of that ambition.

This debate is about UK-based businesses, but we must also recognise that we are part of a global market, with the huge opportunities that that offers. We are working hard with our international partners to boost collaboration and open new markets for innovative firms globally. We have agreed industrial strategy partnerships with France and Japan, have a Saudi-UK strategic partnership and an India-UK technology security initiative, and are pursuing deeper connections still with other key markets. Last autumn, the top US tech firms, mentioned across this debate, committed to investing £31 billion in the UK.

We are right across the things that matter to start-ups here in relation to capital: the force that is the BBB investing more; the National Wealth Fund investing more; a sovereign AI unit investing earlier; and the Mansion House pension fund reforms that are spurring greater investment. We are bringing capital to the service of British start-ups.

In the context of compute—a critical input for AI—both our AI growth zones programme and our AI research resource programme are ensuring that British companies are at the front of the queue when it comes to adequate compute for AI. When it comes to Government as a customer, the advance market commitment and the reforms that I mentioned in relation to the MOD aspire to that and to ensuring that the Government are the best partner that UK start-ups can benefit from.

When it comes to building a sense of community for talent in this country, the global talent taskforce, the global talent fund and, crucially, the enterprise management incentives scheme—now one of the world’s best tax incentive schemes for early-stage employees to have deep equity participation in start-ups—mean that Britain is at the front of the queue in convening a compelling community of tech talent. When it comes to clarity on regulation, the AI growth lab, the Regulatory Innovation Office reforms that I mentioned and the growth mandates for regulators mean that Britain is regulating dynamically —moving regulation at the pace of technological progress.

At the heart of all this is a culture that prizes innovation and that says to entrepreneurs that their success is our national success, and that their companies are national champions when they create jobs and invest in frontier innovation here. We are radically shifting Britain’s culture to being a culture of agency and innovation.

In that context, I am grateful to all Members across the House for their partnership in that mission. The UK’s exceptional technology sector is a key national asset. The steps that the Government are taking will ensure that UK-based tech companies thrive at every stage of their growth.

15:47

[Peter Fortune]

I thank everybody for their contributions. Let me start with the party spokesmen. I pay tribute to the shadow Secretary of State, my hon. Friend the Member for Hornchurch and Upminster (Julia Lopez), for her wisdom and her towering intellect in recognising the self-evident glamour that is dripping from me even as I stand here—it takes one to know one. As ever, she made informed points—and of course I agree with them, because she is my boss.

I thank the Minister for his response. There were many points in it that I agree with and some that I would like to have further conversation on—particularly the points about procurement. That is really important and will become an increasing challenge as we move forward.

The Liberal Democrat spokesperson, the hon. Member for Harpenden and Berkhamsted (Victoria Collins), set out a five-point plan that I would struggle to disagree with. In particular, outcomes-focused regulations would ensure that we have proper competition. It was encouraging that all three party spokespeople spoke from an informed and passionate place. That bodes well for the future.

I turn to the Back-Bench contributions. The hon. Member for Caerphilly (Chris Evans) talked about what a targeted group of engineers can do when they are given the space to flourish. He made some important points about UKRI and how it needs to be reorganised. We recently met the new chief executive, and there is a lot of work to do there, so perhaps the Minister would like to focus on that and push the way that UKRI distributes those funds.

I turn to the hon. and gallant Member for Tunbridge Wells (Mike Martin). I had a quick look on Wikipedia and found out that we were in the same regiment; I did not know that before. I think he was a young second lieutenant when I was a mere legend of history. We will meet afterwards and swap some stories. He highlighted the absurdity of losing potential unicorns—companies that start and can grow here—which are not able to get to the place they need to because there is no incubator for growth. That point was very well made.

The hon. Member for Paisley and Renfrewshire North (Alison Taylor) talked about how important access to finance is for the great companies that she highlighted, not just in her constituency but right across Scotland. If there were an injection of capital, we could see some glowing achievements.

The hon. Member for West Dorset (Edward Morello) talked about how technology can be used, and he especially focused on climate. We will face problems over the next 10 or 20 years, and we will need to develop that technology, some of which will have to be sovereign technology so that we can face those challenges.

Last but never, ever least, the hon. Member for Strangford (Jim Shannon) rose to his feet to say that he has many great things to say about Northern Ireland; we all know that Northern Ireland has many great things to say about him. I was amused when the hon. Member for Weston-super-Mare (Dan Aldridge) asked whether he had spoken to a company in Northern Ireland. He has spoken to everybody in Northern Ireland—twice. He made an important point about how the cyber-security industry has grown in the past 20 to 30 years, and I want to push the Minister gently on that. Something that was highlighted to us at Space-Comm last week was the need to develop the defence investment plan and get it out as quickly as possible. I will not put the boot in, because the debate has been good natured, but a lot of people in industry are really looking for that to be brought forward.

I am encouraged by this debate, which has been good natured and well informed. We all agree that if we get this right, with the right focus, we can be a world leader in this industry. We will punch not just above our weight but as technological champions. We have the opportunity to take the UK economy into the second half of the 21st century and beyond. I thank hon. Members for their contributions.

Question put and agreed to.

Resolved,

That this House has considered Government support for UK-based tech companies.

15:51

Sitting suspended.