UK Budget 2025: Stripe + Startup Coalition

We are delighted to have uh the minister for AI with us, Kiska Nayan. Uh we are also going to be joined by Alex Dep uh the chancellor's entrepreneurship

adviser. So with that, I'm I'm going to

adviser. So with that, I'm I'm going to hand over to Dom from the startup coalition who's going to be moderating this discussion. Dom over to you.

this discussion. Dom over to you.

>> Thanks everyone for joining. Um first of all, Keska, what's in the budget? What

was in the budget today?

>> Thanks Tom. Thanks Tripe. Uh can I firstly just say how great it is to be a stripe. Uh it was a fintech company that

stripe. Uh it was a fintech company that I used to look at a lot when I was a fintech venture investor. I remember

when I was at Atomico, we were figuring out uh what to do with the stake that Atomico had in uh in in in Stripe and my strong recommendation was a was a big hold and so I'm delighted to have been

validated by the uh progress the company has made and uh and delighted to be here today as well. Look, I can't be more excited uh about the budget as it relates to tech startups and AI. Uh let

me let me start with a preview of uh what came before today uh as a uh as a trail in the run-up to the budget which was an immense package on AI very

specifically uh which I think made a big dent and uh it all started I remember about 8 weeks ago now I wrote a note to Liz uh my boss and said um it feels like we're doing quite a lot across

government on tech and AI but for some reason the uh the the situation is Britain the in is the inverse of the US where the narrative drags reality up into the future. And in Britain, our reality is actually not that bad, but

the narrative kind of drags us down. And

we need to shift both the reality and shift narrative upwards. And so we uh made sure that there was an immense focus on a series of deals. We have a bunch of US unicorns coming here,

Cursor, Perplexity, some of the large data center operators, Vantage, all opening up their offices here. But we

wanted to make sure that some of the best leaders in this in the world on AI and tech uh were partnering with government in a sign of both confidence and a sign of conviction in what we could do together. Tom Blumfield uh Roya

Hatsell, Simon Johnson, uh but also in the form of uh chairing the sovereign unit, James Weiss wanted to make sure that there was a very specific focus on uh conviction in British firms building

here as well. And so we launched a half a billion venture unit that James is going to chair. uh launched a world first advanced market uh commitment for

novel chips uh and alongside that uh a very specific focus uh today as well on semiconductors in Wales. And then the final bit was >> not that you're biased about the Wales bit obviously.

>> Yeah. Well, I mean I'll come to that in a second. Um I uh the third thing which

a second. Um I uh the third thing which was really critical was that it felt like Britain could really lead the world in saying AI is uh going to be critical to the future of the economy but it is

going to be critical uh not only by creating slop by by uh pushing the frontiers of science and so we published an AI for science strategy with a bunch of funding associated with it a mission

as a country to discover new life-saving drugs and a bunch of associated initiatives on autonomous labs uh data and compute as well as talent.

And as a sign of validation, it was nice to see the US launch it 2 days later with effectively a very similar content base uh as well. Uh and so across the

board investment deals, a bunch of uh talent uh coming and telling us how we can partner together uh a very specific direction in terms of science was critical. But the thing that was most

critical. But the thing that was most fundamental which was very close to my heart uh both then and in today's announcements was uh this revived sense

of uh the history of uh innovation and innovationist geography in this country.

Uh when I thought uh about the fact that we announced the largest single infrastructure investment in the history of Wales two weeks ago, 10 billion, 5,000 jobs, AI as well as SMRs firing up

uh the future of North Wales together.

That was a very proud moment for us. Uh

about 5 days later, we announced the second largest infrastructure investment deal in the history of Wales in South Wales. Another 10 billion, 5,000 jobs or

Wales. Another 10 billion, 5,000 jobs or so. Uh huge compute cluster as well as a

so. Uh huge compute cluster as well as a bunch of funding for adoption as well.

And the reason this is important is not just because it's really critical for those uh geographies. It's critical

because of the wider strategic picture which is that uh we have this amazing history of innovation spread across Britain. And I think we've forgotten it,

Britain. And I think we've forgotten it, right? Uh, and so we've forgotten the

right? Uh, and so we've forgotten the fact that James Watts in both Glasgow and Birmingham discovered the steam engine and then powered the modern industrial revolution. We've forgotten

industrial revolution. We've forgotten that Belfast was the linen capital of the world in the 19th century, powered an industrial boom. Uh, Harry Broly in Sheffield discovering stainless steel, a

versatile and robust material that powered manufacturing and medicine. and

we've uh forgotten the range of innovations uh that have meant that each part of this country has changed the world before and that each part of the country can change the world again. And

so today's budget announcements are really primarily about uh that lens of including as many people as we can in the frontier of technology through expanding stock option share incentives so that more workers can have a stake in

the future of this economy by making sure that funding through VCG and EIS is expanded so that people and kids in uh South Wales and the north uh part of uh

Scotland and uh uh England are all able to feel like they have the funding to be able to power the future of innovation.

uh but also a deep understanding that yes despite the most difficult of fiscal circumstances uh we want to make sure that there's a clear argument running through the budget on the growth driver and that growth driver is the future of

technology and the future of energy enabling technology uh running together as well and that's why in particular the prime minister's announcements on uh endorsing fully John Fingleton's review

on nuclear was a really important part alongside the very major energy package we announced last week for AI proteins as well. So the way I think about it is

as well. So the way I think about it is huge investments, tons of people coming in with great credibility, uh focus on sovereignty, focus on science, but at the heart of it, there's very critical uh argument that the future of growth in

this country has to be urgent, has to be spread across this country. Uh and it is now backed by very robust material policy changes as well.

>> I tell you what, why why do we come to you now, Alex? You've come straight off the off the radio. I appreciate it. Um,

how's today been as you take a a celebratory?

>> Um, it's been a long looking forward to that all day. Um, today's gone well. I

think it's been great because um, look, I'll say the same thing that I've and you're all from this community, right?

So, you'll get this like every time you talk to the press, it's likememes, business, corporate, they treat these people, you know, treat everything like this homogeneous blob of business and like that's not it, right? There's

44,000 scaleups in the UK. They're

generating over a trillion pounds worth of economic output. They're scaling

faster than else. They're creating good jobs. Like this is the part of the

jobs. Like this is the part of the economy that we need the public discourse and mainstream narrative to recognize and get behind. Like you need the taxi driver to understand like why

we're so important. And so like the Treasury um press office was like, "Oh yeah, I think it's all right. We don't

really need you for any media rounds."

And then literally the phone's been going off the hook all day being like, "Can we talk about this like EMI thing?"

So that's how I've managed to get myself in trouble because it's it's actual cut through. And I think that's great

through. And I think that's great because it's the first step in what I think will hopefully be I think you've coined this phrase because people keep picking it up. It's like we've got our mojo back. Did you coin that phrase?

mojo back. Did you coin that phrase?

>> I I I mojo is not me. I always say vibes.

>> THAT'S IT. VIBES. YOU KNOW, PEOPLE ARE LIKE, "Is this the beginning of vibes?"

And I'm like, I hate that phrase. But

yes, >> that's all about the vibes, isn't it?

We've shifted the vibe >> as you sit there in your suit.

>> I've got to do the politics.

>> I know you got to do the politics. So,

yeah, I think I think it's gone better than I'd hoped. But in fairness, like credit to the chancellor, I heard that um when things always get dicey right at the end where you kind of looking at

your headroom and things have got to come in and out. There was push to change some of my stuff and she stuck firm and she said, "No, Alex said, and if we're going to do this, let's do it properly." and she did and she stuck to

properly." and she did and she stuck to her guns and she pushed my stuff through. So, I think we should all like

through. So, I think we should all like be really appreciative of the fact that Rachel gets this even if like most of other people don't. Obviously, you do.

>> No, definitely. I mean, I think it's worth saying uh first of all, like I've spent the past however long working with both of these, but Alex in particular in with this package and she's done an absolute hell of a job in in fighting

for a bunch of this stuff. Like I think it's fair to say that especially on EMI, which is the biggest thing that in our mind is in the budget, the most important thing, it wouldn't have happened without Alex doing the leg work behind the scenes and giving everyone a chance.

>> Are you groveling now?

>> Yeah. Yeah.

>> He sent the newsletter out and acted like the startup coalition had done it all. And I was I sent him a message and

all. And I was I sent him a message and went, "What's the actual fuck?"

>> That was the that's the polite messages that I get from government advisor every day. But what so so just quickly so you

day. But what so so just quickly so you know we we kind of Kisha did a little bit of the overview of the package but like what do you see as the most important bits from your perspective what are the things that matter the most

>> so for me was I was really clear that I wasn't going to focus on startups because I think we've got like a fairly decent regime >> and how are you defining startups there that's like super early what's the >> seeds and series A like we've got a

healthy VC like network we've got deep talent pools and the incentives CIS and EIS are like relatively okay I give it like an A out of 10 is there stuff to do you're all going to talk to about the

ASA long stop and SCIS of course right but in terms of like what's going to move the needle on this economy it is that when you get to like 10 million in revenue or you need a 10 million pound

or a 20 million pound check you don't have a lot of options most people get on a plane to the US or they sell too early or worse they you know they like they enter the valley of death and die and I know because I've been there twice

myself so that's where I knew I needed to focus and I needed to focus on two things one access to capital so how do we get more money into the system. And

the big myth of the UK right now is that we have a capital problem. We do not have a capital problem. We have a capital allocation problem. Our money is in our houses and it's overseas. That's

the problem. And that all started in the mid '9s when we changed the defined benefits pension schemes to defined contribution. And you saw a flight of

contribution. And you saw a flight of capital from UK equities that so you 60% of pensioners money used to be in in UK equities and riskier of funds. It's now

6%. Like when people talk to you about the productivity problem, that's the problem. We don't have that investment

problem. We don't have that investment going in. And so if we change that and

going in. And so if we change that and we open up the pathways for pension to flow, we've got more than enough money to do what we need to do. And that's

good for pensioners, right? Because VC

firms, top quartile VC firms in the UK return 23%. Right? It's exactly the same

return 23%. Right? It's exactly the same as the US. We just need more of it. So

we have all the building blocks. We just

haven't put the pieces together. So I

just have Sorry, I have to do a little plea. So keep talent, EMI, we need it.

plea. So keep talent, EMI, we need it.

You guys need I'm sure not all you are founders. Like you want to feel

founders. Like you want to feel meaningful stake in these companies. You

know, the average kind of scale up is 15 years old to 10 years is, you know, we're kneecapping you guys. So get that in. Open up pathways, which is the VCT

in. Open up pathways, which is the VCT EIS um stuff. It's getting the BBB to agree to mint 10 new series B funds because then you've got double the amount of funding in there. But like

that's not it, right? There's so much more to do. And so what I'd really encourage you to do is read the prospectus. There's a call for evidence

prospectus. There's a call for evidence in there because we recognize, I recognize, and Rachel agrees with me, we need to do more. We need to reward the risk takers and I'm not sure we do that

very well at the moment. So, the call for evidence is are the incentives that we're using right now working? How can

we go further? Is it delivering value for money? How do we incentivize more

for money? How do we incentivize more entrepreneurs to stay and and scale here? Um and then uh the other bits and

here? Um and then uh the other bits and pieces that are not in that call for review. But the things that I'll be

review. But the things that I'll be focused on are um making sure we have a front door to government so that you come through one door and you don't have to talk to DC and talk to HMT and talk

to number 10. It's all streamlined to give you the regulatory procurement and and monetary support that you need. And

then finally we are actually going to look at at procurement which I think is a huge deal because >> yeah I was going to come back to that >> as you will all tell me give me some revenue right over equity. So we have a massive spending power in this

government and we need to direct some of that firepower at our best companies. So

we need to um sort out procurement and I'm not going to say it's going to be easy. In fact, I think it's going to be

easy. In fact, I think it's going to be actually really hard. But why not?

>> Yeah. Yeah. Well, I was going to come I was going to actually I was going to come to Kenishra on two things like one is like you know I think both of you guys are probably amongst the biggest champions for for the ecosystem in government and you know you talked

earlier about the kind of vibe shift and how we start to tell a more positive story and that we have the opposite problem of the US sometimes where the policy in the US is crap but the vibes is better like and how do we how do we kind of invert that and how can we

leverage the springboard from some of the stuff today but more generally the the kind of narrative drive and then the second is on procurement specifically it's like you know I think the AI package is the really interesting stuff around advanced market commitments.

There's some more stuff on advanced market commitments today around clean concrete which Charlie and my team who does climate tech delighted about um and so like there's some really cool stuff there but like what are the the ways in which you think we can actually unlock some of that using the government money

that's already spent?

>> Yeah, that's great. So I think the narrative thing is really really important. One of the things that was

important. One of the things that was amazing was uh when we launched this huge 25 billion AI package last week. Um

we had a bunch of people I had a bunch of people from the white house uh the head of the AI labs at Stanford basically tweeted out saying this is um

the most advanced level of policym in AI globally. The UK is like killing every

globally. The UK is like killing every other country on it. Uh but there are very few UK founders uh who who do that.

Uh and then as I say like 3 days later the US launched a kind of AI for science strategy basically saying what we were saying obviously with a bit more fiscal might behind it given the scale of the US like every founder piled in it was

like Lisa Sue AMD open AI like everyone piled in like this is the greatest thing and it's it's genuinely very good um uh and and we did a very similar thing like 3 days prior and so there's this whole

thing where um because we've had this long history uh over the last decade and a half but actually much longer still of not just flack productivity but also very low levels of investment in tech.

And exactly to Alex's point, the sense that this part of the economy has not been appreciated as the driver of progress and prosperity for everyone in this country and not just for people in

this room. uh because of that uh I feel

this room. uh because of that uh I feel like there's a big disconnect between the political relevance of this agenda up till now and at the same time the understanding of politics in this

context and uh a huge part of it is to bridge those two things to build trust so that together uh when we do things right u we can tell that story together and we can tell a national story why of

why this is a collective mission and when we do things wrong we're able to have those tough conversations as well and so uh that's one big thing and and the whole point was to try and basically do a big vibe shift. You know, I even

like did a website about it. Like the

whole point is just like tell gimmicky stories to cut through and say this is a big deal and people care about it and uh you're probably underestimating how much a kid in Barry really cares about it. I

had a kid write to me he was 16 years old will. He wrote to me and he said

old will. He wrote to me and he said never heard of me. Uh never really been into like my parents aren't in tech or anything but I just learned to code at home and I just coded a Welsh language STEM learning platform. I saw you were

in venture. I'm super excited about VC.

in venture. I'm super excited about VC.

this kid is like in Barry in South Wales and he's like I would like to come and pitch to you and I was like hey dude like I'm kind of in politics now but you know let's have a chat and he came and then he he like shadowed you and Blair for a day and now he's like trying to go

and uh create a company and so we can just do this because there's immense appetite amongst kids in particular across this country for the excitement that all of us have felt about this part of the world and and I think that's huge

on your on your procurement point the the the thing we wanted to do in uh the AI movement was effectively to say that two forms of public service reform.

There's heroic change. You just get awesome people to just take a bite and just like ek out something uh from the system and talk about it. And there's

systemic change where we it's much easier to do heroic change, right? It's

like you go and do a fiscal event or you do a moment and you kind of do a land grab and you say, "Hey, we've got got this done." That's kind of where we've

this done." That's kind of where we've gotten to on the advanced market. We

basically said we're going to go and do 100 million. We're going to design it in

100 million. We're going to design it in a very thoughtful way to basically say as you unlock incremental technical risk, we'll unlock revenue on the context effectively to align it with stage financing and so you can go and

raise a ton of money out of it. Um the

next and big step for us both in DEIT and way beyond DEIT would be to uh to actually unlock core procurement budgets rather than just the kind of innovation side lift uh or the AMC kind of part of

it which ends up being a small but you know really meaningful part still and that is much harder because exactly as Alex says that's partly about getting the value for money thing right by the treasury. We're in a very fiscally

treasury. We're in a very fiscally constrained space, right? But but I think it's very possible to do that. And

uh the way to do it, I think in part uh is for us to be able to build a much stronger interplay between what government demands and what people can supply and the front shop window point

is really really critical. We're trying

to do a big concier service and uh do say it. Uh but you know clearly all of

say it. Uh but you know clearly all of government doing this in a way more effective way and in particular departments like the mod doing this in a very effective way would be the biggest unlock that we can get. Yeah, Alex, I don't know whether you want to kind of

talk about you sort of when we've spoken about it in the past, you see procurement as the the big the next big thing after after the sort of work that you've done on the budget package like but a little bit of reflection on that and any anything else in the package you

think's worth sort of highlighting that we haven't covered off so far that you think is really important.

>> Um yeah, there probably is my brain's just totally fried. Um, so the BBB have made a commitment to look at IP lending, which um, I think as founders of of businesses that build IP, that's quite

good because we're usually asset light.

So like venture debt's really expensive, debt is kind of not that available to us. And I I do think there is

us. And I I do think there is particularly like capital intensive projects that would be better off funding through debt than equity. So I

think that's a big step forward for us because like the banks have been I mean I remember talking to Barclayers like eight years ago about IP lending and they're like, "Oh yeah, you know, we're going to try and still really got a product at market." So, it's like now

now we're going to try. Um, so I think that's big. We're looking at

that's big. We're looking at non-competes. Um, try to curve some of

non-competes. Um, try to curve some of the excessive like two-year non-competes because that's not good for our AI or data sector. Um, there are two two

data sector. Um, there are two two little things that I think are really important as well as the the the um AMC stuff. But I think on the procurement

stuff. But I think on the procurement point, um, I just think that like when you look at we've given the British Business Bank 26 million, right? And

there's a real debt billion, sorry, 26 billion. Um there's a real danger with

billion. Um there's a real danger with the um with that that we could end up crowding out money because we want them to be more commercial, take bigger bets because what what that's that what the

bank has typically done is like tried to patch up market failures like to move into space and this some of that still needs to happen, right? Like that's why we're working on so sovereign AI and it's amazing working with DC like I genuinely DC's got the best people in it

that like it makes my job so much easier because I'm we're talking the same language. Same with OFI. Again, another

language. Same with OFI. Again, another

department that I really enjoy working with. One of the ways that we make sure

with. One of the ways that we make sure that doesn't happen and there are lots of ways, but like imagine like the power of that like public purse going into a company when we could also say, "All

right, we think you are strategically important to this country. You like what you do. Let's say it's you. Here is 10

you do. Let's say it's you. Here is 10 million and also we're going to put you on our procurement framework so you can access the mod straight away." That is really powerful because most of the

reason that our health tech um companies leave and go to the US is not because they can't raise the money. It's because

the NHS makes them jump through about a billion different hoops to get onto their like framework and it's just much easier to go over to the US and then the market's like you know 50 times the size or whatever and then you know you get

the money on top of it. So we need to start like playing smart like we can't go toe-to-toe with the Americans nor why should we right there are some people that should raise American money. There

are some people that should go and go to America. Like I'm not saying that. Like

America. Like I'm not saying that. Like

when American VCs come over here, I celebrate that. But we need credible

celebrate that. But we need credible domestic alternatives if this country is going to grow, which means we need to be able to deploy our own capital and we need to use our own markets more effectively. And that's why we want to

effectively. And that's why we want to do this procurement sprint um for the six months um and run it outside of typical procurement processes. Don't

tell anyone I'm saying this stuff. Um

because like think about everything good that's happened in government vaccines didn't go through the normal routes right like everything that we for some reason like in government we just we try

to like basically make everything perfect and have no risk and if you read the perspectus what you will say what you will read in that perspectus is if we expect you to take risks then this

government's got to take risks we're not going to get everything right companies are going to fail and I think that is what I'm trying to inject into the treasury a little bit is like this idea of risk takingaking and do you know what they're actually quite game like I mean

they're quite scared at the same time but they are quite game for it so I feel really I feel really actually quite positive about 2026 >> good that's very exciting I think one final question before I I'll I'll spin it to the crowd for a couple before Kesh

to get his flight where are you flying to you're going you're doing a countrywide >> so I'm doing this tour right I'm going to five cities in 24 hours basically selling what we've achieved on AI and tech in the budget I'm going to

Edinburgh tonight Newcastle Sheffield I think we've ended up skipping Manchester Belfast and then Wales and so >> amazing. Okay. So, so before you have to

>> amazing. Okay. So, so before you have to dispare like my one final question is look like the reality is the stories in the papers tomorrow will probably be like tax rises it's all terrible it's all disaster like there is this real

challenge isn't there of like how you balance that sort of the what the line might be that comes out of there and budget day and then the things that you know we see and like we had our newsletter out and like well we didn't give Alex all the credit she very

rightly deserves like as in what we did say is actually broadly speaking there's a bunch of measures in there that we think are pretty good for the community like how do we tell that story effectively how do we acknowledge other wider stuff and understand the challenge

but but kind of explain to people actually know from the community side it's it's pretty decent because I've had that today with founders where they've been like it's all the croc of [ __ ] and I've been actually no like look at the package like there's proper stuff in there so like for the people in this

room who are having those conversations who might or might have not looked at the detail and be like actually what you talking about how would you kind of frame that I wanted to finish it when I come to students >> well I I think this is really important

because um one when when we do things that are good and people recognize that in the public context that creates political space for people to keep doing a lot more next time round. And so

there's a hopefully a bunch of things that you think have have been good things that we've done today and over the course of the last couple of weeks.

If you feel that uh please say that in your WhatsApp groups, in your public context if you feel comfortable because one of the things I found very frustrating, I remember on Friday um the times called me and and and I was like,

"Hey, we've just landed two of the biggest infrastructure investments in the history of Wales. uh 25 billion of deals uh bunch of top tier people associating with government James is going to run sovereign AI we've got a world first AMC we've got an AI for

science strategy it's just like across the board we've just thrown the kitchen sink at it and all these US guys are saying this is like a global leadership moment why have you not written about it and the guy was like hey I kind of pitched it to the editor and they were

more interested in PLP drama uh and so what happens when that happens is when I text uh founders they all text back saying this is awesome uh why is it on the papers uh well part of the way we

create this is by creating a demand side of people who care about this stuff when it goes well talking about it. By the

way, there are things that have not gone well, you should also put pressure on us publicly alongside it. But if you do that in a more balanced way uh by recognizing what has gone well and hopefully praising the chancellor and

Alex and others for kind of putting their conviction and their political capital behind it, it just creates huge political space for us to be able to go way further on this agenda. And so I think um if I had one ask of everyone in

this room, it would be that each of you has a huge role to play uh as outsized uh influencers in this wider ecosystem to shape a sense of what we believe in together, which is that this is a deeply

important part of the economy. Uh it's a part of the economy that is being increasingly recognized by government as important uh in a context of huge fiscal stress. We have put our weight behind

stress. We have put our weight behind tech and AI. Uh there are some things we should go further on. Procurement is a really critical one and you should tell us that publicly as well. Uh because

every moment you do that, it means that all of us inside government are able to point to it and say we got praise. We

got political capital from things that went right. This is the next uh mission

went right. This is the next uh mission and mountain that we need to walk up.

Spectacular. I can see your PS packing up your stuff cuz I think you got run.

So uh thanks very much for that. I

really appreciate it. Um for the panel this evening, I've got a really brilliant lineup for you guys. Um I've

got Sam Bowman um who is editor of Works in Progress, Matt Pennyard who is um founding partner of ADA Ventures and MVA

Ibar who is co-founder and CEO of Hive.

Um I want to start by asking you guys all about the vibes. Um there the the chancellor clearly thinks that she's done you know um enough to sort of shift

the dial on this and and Keshka was very buoyant about this. But I mean from what you saw in both the budget package but also the AI package that we saw um last

week now um there does seem to be sort of like momentum is on our side. So I

mean is this enough to shift the vibe and and are you feeling a lot more positive? Sam, how about I start with

positive? Sam, how about I start with you first?

>> Uh no. Uh it's like the most miserable budget of my entire life. Uh I I'm like very it's very nice to see people feel optimistic and happy about this. But um

I mean really it was the only I think there was a story in the New Statesman um yesterday that said that the leak that they had done that they were going to raise income tax was apparently

planned so that they could then announce on budget day that they weren't going to raise income tax after all and have a good news story for that day. And it

does sort of feel like the um the kind of the only good news is the stuff that they said they might do that they aren't doing like the um exit attacks. And

bravo to the startup coalition for doing that. I really really um think that was

that. I really really um think that was amazing work. Um but you know for for

amazing work. Um but you know for for context you know in 1990 3.7% of taxpayers were higher rate taxpayers. Um

in 2020 so only 5 years ago 7 12% of taxpayers were by 2029. So in four years 17% of taxpayers are going to be higher rate taxpayers. So fiscal drift which is

rate taxpayers. So fiscal drift which is just holding the uh bans constant and letting inflation push people into the higher rate the 40 the 40 but really 42p

rate um is is I mean more than doubling in the last in in 10 years the number of people who are facing those really high marginal tax rates. um the number I mean it's really worth bearing in mind the

scale of spending increases and tax increases um and and a little bit of borrowing increases. So by the end of

borrowing increases. So by the end of the parliament we're going to be spending 96 billion pounds more every year um just based on the last month

year and a half of budgets um who knows what's to come and we'll be taxing 79 billion pounds more. So that's about 2.7% of GDP increase in spending and slightly less than that in tax raising.

I mean this is completely catastrophic, right? This was a this was a government

right? This was a this was a government that came in saying we're not going to raise taxes on working people which immediately cut off its ability to raise any of the broad-based taxes that you

know they're not nice to pay but they are relatively less harmful economically and so has backed itself into a corner because it has so many spending commitments that it's made um that it means it has to raise other taxes that

are much more economically damaging by much more. And it would be one thing if

much more. And it would be one thing if they were forced by circumstances into this but they're not. I mean, some of the tax increases or some of the spending increases are completely

bizarre. You know, the the railway uh

bizarre. You know, the the railway uh ticket freeze, they were advertising that this um will cut £315 a year from the um railway fair paid by somebody who

commutes from Milton Kees to London.

Like, why is that a priority? I don't

understand. I literally don't understand. The the vast majority of

understand. The the vast majority of people who use railways are people who are relatively well off and live in the southeast. If you are going to spend

southeast. If you are going to spend money on infrastructure, for example, or transit, then people who take the the train to work every day are not the people you want to help. The thing that really matters, I mean, all of the stuff

ultimately was a bit of a damn squ budget. It was there was nothing

budget. It was there was nothing completely terrible. There were a couple

completely terrible. There were a couple of good things that, you know, I I'm happy to go into the like three semi good things uh at some point so that I'm not a total downer. But I mean all of

this is the shuffling deck chairs because as long as economic growth is stagnant um this is I mean this is the world of degrowth like we we have lived in a degrowth country for 15 years. Um

the most important announcement by far was the non-announcement on the nuclear regulatory task force. Um energy is one of the really one of the three really big supply side things that the UK is a really really really bad position on.

and the nuclear regulatory task force came out with an excellent report um earlier this week that proposed um I think it was 47 recommendations which really would be transformative and I had been very very optimistic and very

hopeful that the government would say that it would be adopting this report and implementing it. Instead they ended up doing kind of the mother of all fudges where the written speech said you know we accept the principle of all of

the proposals here and we we plan to implement them. The chancellor herself

implement them. The chancellor herself didn't even say that. she just stood up and said, "Oh, I really like the report.

It's great. Anyway, thanks very much.

We'll move on." And I think that the takeaway for me is, and the thing that makes me depressed, and I should say I'm ultimately a very optimistic guy. I'm

just kind of short-term short-term pessimistic. I'm short-term pessimistic,

pessimistic. I'm short-term pessimistic, long-term optimistic about the UK. And

um, you know, the the reason to be pessimistic isn't that they've raised this tax or that they've increased this spending. You know, reasonable people

spending. You know, reasonable people can disagree about that. it's that they seem totally incapable of doing any supply side regulatory reform. Like they

seem completely incapable, they seem paralyzed and unable to do any of the changes that would be needed to drive economic growth. And if that's true,

economic growth. And if that's true, then we're just going to see more and more budgets like this and we're going to feel like we're circling the drain until something changes. I think um I think the nuclear point is really well

made and I think actually what we heard from Keska this evening is a little bit you know bit more positive than what we heard from the chancellor at the dispatch box which was you know fully endorsed so again we're talking sort of

specifics on language but we will see we will see on that point Matt um take us up a notch please for the love of >> yeah I think these things can get pretty boring that was very impressive by the way amazing analysis but I'd call

[ __ ] on the vibes is what you asked about and I think you can use uh data to prove a narrative. I think a lot of this is about narrative. We live in a country

that tends to have a negative bias when it comes to nar narrative. We love to [ __ ] and moan about things. The media

just perpetuates a lot of that. But

actually, as I sit here as a taxpayer and a VC, I genuinely my vibes is what you asked about are really positive. I

think this is a launchpad. It was a bit of a this way that way budget, but I think that it could be a launchpad and vibes for me come from do I see really

bloody smart people that I respect having the era of government and the answer to that is yes. Yeah, I think we've heard from two of them here today earlier. I think when I see the things

earlier. I think when I see the things that Matt Clifford talks about, if you haven't seen the um LFG speech, say let's [ __ ] go or let's get growth or what whatever that >> looking for growth.

>> Looking for growth, whatever that really stands for, >> you know that and Matt is one of the smartest people I know and and he is talking a narrative that gives me longer

term confidence. And so I think that

term confidence. And so I think that narrative is extremely important. You

know, I just also would like to take a quick vibe check in the room. Can you

put your hand up if you're a founder?

So, it's like 60% founders.

Do you feel And then everybody put your hand up if you feel on balance positive about the budget today.

Okay. So, it's getting there, right? So,

people have got to be convinced. But I

would say the vibes are as a taxpayer, who's got the year of government, who is influencing government? And I felt

influencing government? And I felt really encouraged when the exit tax was being booted around and pretty quickly somebody listened and that got taken off the table. Now I don't know the

the table. Now I don't know the machinations behind that but I felt pretty good to live in a country where that's possible. So positive vibes.

that's possible. So positive vibes.

>> Perfect. And Murva you're on the ground out of the cold face so to speak. So you

know how how are you feeling? I think um I'm in um the look position where I have lots of founders around me and speak to them constantly and I think more than ever since my journey have started in

2021 to now I've seen the past year or so a real sort of togetherness with founders of like actually let's let's build Europe great again let's let's build the UK let's take it on and I've

um when the exit tax was floated I thought everyone came together really quickly like you said I think there's more um communication with government than ever before in the first few years compared to now. Um I think that they're getting in the right place. I think it's

going to be slow for sure. I think we just need to take more risk um generally. I think in I think the the

generally. I think in I think the the growth will come from entrepreneurs taking risk and building great companies and then hopefully listing here as well.

And I think anything we can do to continue that is just going to benefit the UK. So my whole thing is just about

the UK. So my whole thing is just about you know culturally because I spend a lot of time in the US because obviously the US is the biggest place for startups and I always think about how what what are they doing right and what can the UK

do better and it's just that culture it's the appetite of taking risk um later stage founders who have IPOed who are successful then reinvesting into early stage founders and building that

ecosystem up and so if we lose a lot of companies to not listing here or exiting that's going to be detrimental because you need those entrepreneurs to reinvest to build up the ecosystem. So, generally

quite positive, but that's maybe I'm a bit in a small echo chamber of just speaking to founders constantly who are just building great businesses. Um, but

I think there's a there's a huge sense of let's make sure we build great business in the UK and how can we actually work with the government um to actually make change and they are listening. I've had lots of

listening. I've had lots of conversations this past year with lots of men who are trying maybe not quick enough uh to what we want as especially as startup founders who are running at the pace of 100 miles per hour and executing really quickly. It can be

sometimes quite frustrating when you see how long it takes to actually deliver the budget and then get it out etc. Um but generally I'm I'm always optimistic.

I think one of the things that I was pretty shocked by today is essentially you know the the chancellor stood at the dispatch box and rattled through the usual sort of suspects cost of living um you know NHS waiting times and then and

went straight to our community next she said you know growth doesn't appear out of thin air it's built by founders who bet on an idea it's firms breaking into new markets and developing new

technologies and I think we heard from Alex tonight like there is a real sort of shift in focus to that sort of scale up capital and so MV and Matt, maybe I can come to you on on that. Um,

particularly, I guess, MVver, from your perspective, you raised like a very impressive 42 million series B earlier this year. You're growing, you're in

this year. You're growing, you're in eight new cities this year. You're

adding to your headcount, so hopefully EMI is going to help you like the sort of like new um thresholds there. But

where, you know, do you do you feel sort of confident that you can continue to build here in the UK and grow here? Um

and then Matt to you sort of like same question particularly when you look down to your portfolio.

>> I think good question. I think there's no doubt that there is definitely a scale of capital gap here for sure compared to the US there's a lot more deeper pockets. Um I I definitely am

deeper pockets. Um I I definitely am more confident. I think the British

more confident. I think the British British bank announced a lot more funding for Lee. I think we need to continue doing that. But for one thing that I do know is we in this in our current round we got an investor in the

US not who led it who joined it. Their

answer was two weeks and the money was wired. In the UK, it's like three, four

wired. In the UK, it's like three, four months of deep due diligence and it's just complete different mindset. And so

that's the problem we're also facing.

It's sort of like just the execution and the pace, but also just the amount of capital. I think the UK is probably the

capital. I think the UK is probably the third third largest market in the world for, you know, ventureback startups, but the the capital in the US is just it just dwarfs the UK. So I I think there

needs to be a lot more in that scale up.

And I think there's a lot of great things in the early stage like you have the EIS relief etc. But that goes to a lot of early stages and companies that we're not sure if we're going to make we really need to invest a lot more capital

a lot deeper pockets into the scaleup companies because they're the companies that are really building you know jobs bringing it hopefully back into the environment. So it is a lot trickier to

environment. So it is a lot trickier to raise you know larger rounds in the UK definitely compared to the US and I have firsthand experience of working with the US how much quicker it is than compared to the the UK unfortunately. And Matt,

do you want to touch on that sort of like point as well on sort of like speed and um speed of execution as well?

>> Um yeah, look, scaleup capital is a global business and so the big providers of scaleup capital tend to be global and so their perspective on what they're going to invest in is international. So

that is a difference from when you're raising locally up to maybe series A. We

take our companies over to San Francisco a couple times a year and we slowly introduce them to the ecosystem over there, both operators and funders for this very reason. So this is a problem.

this remains a problem but it's because something doesn't get fixed overnight.

Can't fix that in in a budget announcement. Um we are doing things in

announcement. Um we are doing things in the right direction. The BBB is now starting to invest directly into some of those companies. They particularly

those companies. They particularly identified series B deep tech companies as a funding issue. That's their

mandate. Step into capital market points of failure. So I think that's something

of failure. So I think that's something that will just take time to change. But

a big driver of that also is the the talent that comes out of these later stage companies. the founders with that

stage companies. the founders with that have made you know financial and and human capital and they're starting to share that and you were all feeling the ecosystem which you operate change I suspect I know I am and so I think that

will change but that's taking longer >> and I think I mean I was at a dinner yesterday evening and they were saying like the reason why in Silicon Valley there are so many more sort of people who are like wanting to found companies

is that they they've seen the benefit directly like they've seen their friends become multi-millionaires etc off the back of that and so Sam I mean I'd love your sort of broader perspective on you

know the the chancellor also touched on the fact that you know when talking about risk as a country as a population like we're not very good at sort of you know retail investment etc. we still

sort of put our money in houses and in cash is etc. So are we seeing a shift in the dial there and and how can we accelerate that so that actually you know everyone feels money in their

pocket and sort of like the upside of the amazing companies that are being built here today. A lot of the discussion around this focuses on the kind of demand side for investment. You

know, it focuses on not enough people are putting money in. I think it's much more important to look at the supply side. Um I think that when you look at

side. Um I think that when you look at for example the performance of listed companies, so the Footsie 250, which is primarily like actually UK operating companies has performed kind of

catastrophically bad over the kind of past 15 years compared to the S&P 500.

Like even if you take out the Mag 7 um which is like really really really crippling um the the analysis it's still much much better to have invested in the >> SP it just a bit doesn't it >> it skews it quite a lot but I mean that

but but the >> the performance of listed companies in the UK has been really really really dreadful and I think that when I hear a lot of groups um especially groups

actually located around here arguing that you know we should be directing more investment from pensions or from ISIS or whatever into UK um assets. I

get quite concerned because I think that it might get the >> my question is slightly different because we can I think we can debate sort of like the specifics there but there is just generally you know people are just more likely to put money into

property more likely to sort of sit on cash how do we you know we've talked about sort of like the founding founders mindset in terms of taking risk but how do we as a sort of population also take risk >> well so so this is the this is the point

that I'm making that I think it's much more important to make sure the investment opportunities are there and attractive and will deliver good returns I think people will will put their money in if those if those opportunities are there. Like I don't think it's about

there. Like I don't think it's about pushing people either via behavioral interventions or via um more kind of like laws um into investing their money.

I I just I think that the idea that um culture is upstream of this stuff I think is probably not in fact the the way it works. I think it's much more likely to be the case that when the money is there, maybe initially the

money will come from international funds and and you know there is a lot of money internationally around but I think it's much much much more likely that people are going to become risk-taking and going to be willing to take money out of

cash savings and put it into more um kind of high-risk investments if those high-risisk investments are going to going to deliver them a good return. And

so far historically in since 2010 that has not been the case in the UK. So that

means that we should be focusing much more on how do we make sure there are lots and lots of opportunities. How do

we reduce costs? Make sure there's a lot of access to talent. Make sure that it's very very easy to set up a business and that the input costs, things like energy, things like labor, things like

property are cheap enough because they're plentiful enough that you can have loads of bets and that you can have businesses that when they do have a good bet can scale up and can make a lot of money. Then in that case, I don't think

money. Then in that case, I don't think there'll be a shortage of people willing to put their money in. It might come internationally at first, but if it's there and if it's delivering a good return, I don't think we're going to need to convince people to take the money out of a cash ISA and put it into

a stocks and shares is. I think they'll do it because the money will be there.

>> I hope so. MVA, I'm going to stick with this sort of theme of like risk because it seems to be the theme of the the um the budget and and even in the Fingleton Review, he talked very much about how we

sort of are very willing to punish risks but not reward success. And you know when you think about how you were starting when you were starting out that's a huge risk you took a bet right like is there anything that you saw in

the budget today or that you would have you would love to see in sort of like the prospectus that Alex talked about that would help encourage sort of like the next generation of entrepreneurs to sort of take that risk and make that bet. I don't know if there's anything

bet. I don't know if there's anything budget for I know I think it's in Finland maybe I can't remember where I'm not sure if this is but there's something of like if the startup founders fail there's like an

unemployment sort of yeah Denmark right there's like an unemployment something and I remember that was a the main thing that on my mind luckily I was just too risky to kind of do it my you know I started the company when I was 24 I

didn't really have any money my parents were like what are you doing I got a job in consulting they were like take it I was like no I want to start my company and they were like right we're not going to give you any money just to, you know, just figure it out yourself. And the

only risk, the only thing I thought about in my head was just like, what if every everybody I spoke to, friends, family, everyone was like, but what if you fail? And I was like, well, I'll

you fail? And I was like, well, I'll just figure out I'll just get a job, right? But I don't I was lucky enough to

right? But I don't I was lucky enough to kind of have that confidence, but I know a lot of people don't, and I think something like that would be quite cool.

Uh, but I don't know if that, you know, is possible. Um, and just I I think just

is possible. Um, and just I I think just as a culture, as a society, just embrace failing a little bit more. Like the

press is so negative. Everything's so

negative. Just in the US, you get praise. If you're a second or third time

praise. If you're a second or third time failed founder, another investor will bet on you again because, okay, you've done it two, three times. Here, it's

just doom and gloom. If you fail, the press are all over you, you know, and I think that's just culturally not a right thing to do. And we have to we have to strip that away and stop being so negative about failure.

>> I think that's really true. And I think you know the sort of like the the you fail and you get back up again and that sort of shows that sort of like strength and resilience is like absolutely key.

Matt, in terms of sort of this call for evidence and how you sort of incentivize entrepreneurs to get going, what's something that you would love to see?

>> Um I think a lot most things do come down to incentive. You know some Charlie Munger or somebody said that famous thing, right? And um I think that

thing, right? And um I think that anything anything more you can do to layer on to encourage people to take that risk that you took cuz you had that inbuilt confidence that allowed you to to do it even when everyone tells you

not to. Some people need a nudge. I

not to. Some people need a nudge. I

actually think this is an unbelievable country to build a startup in. It's got

the rule of law. It's got some things that we sort of are less talked about and less celebrated that you don't get around the world. Um so I I think we're actually pretty well set up here. The

the startup kind of production engine here is operating at full steam. Um, I

don't think that's part of the part of the issue. I think with EIS and those

the issue. I think with EIS and those kind of things, that's wonderful. That

really crowds in capital. Um, I think the issue is more further downstream and I think it's things like we don't want to sell another deep mine for 400 million quid. You know, I think those

million quid. You know, I think those are the issues really. Where is that scale up capital? Where's that

ecosystem? By the way, I think it's coming. You know, we can focus on the

coming. You know, we can focus on the negatives about stock market performance and things like that. They're trying to change. I don't think we would sit in a

change. I don't think we would sit in a room like this 10 years ago and have the energy, the vitality. I mean, I couldn't believe that Alex and we've probably all seen her do that show a few times before. This woman is a wrecking ball in

before. This woman is a wrecking ball in snakeskin boots, right? I mean, like, you wouldn't see that level of access of somebody with that point of view and that perseverance being given. They'd be

shut the door be closed on them, right?

So, I think we are living in a in a world that is more building the future that we're talking about. I actually

don't think it's so much about incentives to get people to start businesses here. I'd love incentives

businesses here. I'd love incentives when they become successful. I love

people the government to say actually if you're successful you know don't reduce entrepreneurs tax relief right that's just it doesn't send the right message it doesn't the narrative then people can pick up on that and start you know

politicizing it and mediaizing it so I think you can do things that do say to people yeah build a company get rich you know that was Matt Clifford's big message right we got to be rich if we want to do all these cool things in this country so yeah you can definitely tweak

the incentive structure to encourage that >> yeah and credit like you know where credit's due like they not only got Alex in but have invited her to stay after sort of seeing that show a few times,

right? And and had Matt Clifford and

right? And and had Matt Clifford and Poppy and now Jason. Um you've got sort of like Jane's wives like these are sort of big names and giants in our industry that are like going in and like doing

their sort of tour of duty and sort of credit to them but also credit to the government for sort of bringing them in.

Thank you so much for coming. Huge

thanks to my panel.