The UK’s Labour party’s landslide victory over the Conservative party signals a sea change in British politics, but what could it mean for venture capital investment?
The Labour party’s manifesto is scant on details about how it plans to support innovation, but there are few things that stand out:
A new publicly owned Great British Energy
To encourage investment in clean homegrown energy, Labour has promised to form a government-owned company, Great British Energy. Capitalised with £8.3bn ($10.6bn) over the next parliament, the company will co-invest in technologies and finance capital-intensive projects.
Bolstering the electricity grid is part of the goal. With grid connections not being offered until the late 2030s, it says it will work with industry to upgrade the national transmission system as this is the biggest obstacle to deploying clean energy.
Great British Energy will partner with energy companies, local authorities and co-operatives to install thousands of onshore wind, solar and hydropower projects.
A National Wealth Fund to decarbonise
A new National Wealth Fund will directly invest in ports, hydrogen and industrial clusters with the aim of helping energy-intensive sectors to decarbonise.
Support for university spinouts
Labour says it will replace short funding cycles for research and development institutions with 10-year budgets. This is aimed at allowing R&D institutions to enter meaningful partnerships with industry to keep the UK at the forefront of global innovation.
It says it will work with universities to support spinouts and work with industry to ensure startups have access to finance that they need to scale. There are no explicit recommendations in the manifesto about how much equity UK universities should take in spinouts, but guidelines by leading academic groups like TenU, which call for equity stakes be less than 20% and as low as 5% in software spinouts, are gaining traction.
Support and regulation of AI
The party promises to introduce a “modern industrial strategy” that supports the development of an artificial intelligence sector. It says it will remove planning barriers to new data centres. It also proposes creating a National Data Library to support cutting-edge research.
More stringent regulations are afoot. The party plans to create a new Regulatory Innovation Office that will help regulators update regulations and speed up approval timelines. It says it will ensure the safe development and use of AI models by introducing binding regulation on the handful of companies developing the most powerful AI models.
