UK Set to Drop Regional Power Price Plan Hated by Industry
The UK government is poised to reject a controversial plan to divide the nation's electricity market into zones, according to people familiar with the matter, retaining one wholesale power price throughout the UK.
Government officials have briefed people closely following the policy that they are inclined not to push ahead with the proposal, according to the people, who asked not to be named discussing a decision that hasn't been announced. They cautioned that a final decision hasn't been made and that it will need involvement from Prime Minister Keir Starmer.
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Forbes
35 minutes ago
- Forbes
More Startup Funding Under U.K. Industrial Plan
Leandros Kalisperas, Chief Investment Officer, British Business bank says the investment outlook is ... More positive More public money is to be invested in startups and scaleups as part of the U.K. government's 'Modern Industrial Strategy,' which was unveiled this week. Under the plan, the publicly funded British Business Bank is to commit £4.0 billion of new capital to early-stage companies working in eight sectors identified as crucial to future economic prosperity. Meanwhile, an additional £2.6 billion will be available to promising startups across all industries. Coinciding with the publication of the strategy document, the British Business Bank (BBB) has released its own research into investment patterns in 2024. The data shows that while private investment flooded into AI startups and scaleups last year, the U.K. trailed the U.S. in key sectors such as advanced manufacturing and life sciences. Thus, if Britain is to become a science-led superpower, then there is some catching up to do. So, how does the British Business Bank see the investment outlook for Britain's technology startups, and what part will the institution play in supporting companies that have the potential to become global leaders? To find out, I spoke to Leandros Kalisperas and Matt Adey, respectively, Chief Investment Officer and Senior Economist at the BBB. The bank's report presents a mixed picture of the investment landscape. On the debit side, funding declined by 2.0% to £10.8 billion while the number of deals fell by a much larger 15% to 2,048. However, Kalisperas says, those figures have to be seen in context. 'Overall, it's positive,' he says. The value of deals was still the fifth highest on record.' And as he points out, for those companies that successfully raised capital, deal sizes were on average larger. 'There was a small decline in percentage terms and a slightly higher decline in deal numbers. That means companies that are getting finance are getting more finance,' he adds. AI Leads The Way Perhaps not surprisingly, companies operating in the artificial intelligence space did particularly well in 2024. According to the report, AI-related deals averaged £8 million, 40% higher than the average in other sectors. This aligns neatly with the desire of policymakers to establish the U.K. as a leader in the field. 'AI is a growth priority, " says Kalisperas. University spinouts also had a good year, collectively raising almost £2 billion. Again, this ties in neatly with the Industrial Strategy's aim of improving and accelerating the commercialisation of university research, something that the U.K. has not always done well. 'We do think this is absolutely critical given Britain's standing in the world. Commercialisation is the challenge, but the numbers speak for themselves in terms of the growth of that,' says Matt Adey. Regions See More Investment As Kalisperas sees it, rising investment in spinouts goes hand in hand with another theme of the report. Investment in Britain's regions is rising, a trend that is seeing London's share of the overall pot fall to 61%. This, he says, speaks to the success of companies emerging from university towns and cities outside London - and not just in and around Oxford and Cambridge. 'We talk about the golden triangle (Oxford, Cambridge, London) , but we are also seeing the development of the Northern Arc,' he says. The eagerness of universities to spin out science-led companies is, to some extent, being matched by local investment trends. Angels are crucially important because they have a local presence and can spot the emergence of promising companies. There are also increasing numbers of VCs working locally. Kalisperas cites the example of Northern Gritstone, a fund specializing in science investment in the North of England. Filling Funding Gaps All of which bodes well for investment in sectors identified by the Industrial Strategy, but there are investment shortfalls. For instance, the report notes that advanced manufacturing and life sciences are both underfunded when compared to investment levels in the U.S. 'When you adjust for the size of the economy, we are behind the US. But we have some successful businesses, so we are building from a strong base. But we do need to get closer to the U.S. funding levels,' says Matt Adey. However, as he stresses, the U.K. is ahead in clean energy and financial technology. That's where the BBB has an opportunity to play a key role in directing investment at strategically important industries. 'The Bank will get considerably more financial power. It is likel that we will be tasked with dealoing those gaps robustly,' says Kalisperas. It would be wrong to suggest that the Modern Industrial Strategy is all about startups. The plan includes cheaper electricity prices for businesses, cheaper and faster grid connection to the power grid, measures to boost exports and more defence spending. There will also be increased investment in quantum computing through a £670 million funding package and five progams to increase the use of AI in the services sector The initiative also sees the government putting more emphasis on promoting growth and innovation in the regions, a development welcomed by Aline Miller, Academic Innovation Lead at Manchester innovation district, Sister. 'This strategic pivot - placing greater emphasis on regional strengths outside the Golden Triangle - marks a needed shift towards a more balanced, inclusive model of national growth,' she said. Meanwhile, the enhanced financial power given to the BBB as part of the financial Strategy will give the bank a greater role in providing strategic funding across all the key sectors, such as life sciences, defence, digital technology and clean energy.
Yahoo
36 minutes ago
- Yahoo
Starmer: No tax rises on working people to reach 5% defence spending pledge
Sir Keir Starmer said Labour would stick to its commitment not to raise taxes to reach a new defence and security spending pledge of 5% of GDP by 2035. The Prime Minister is meeting leaders of other Nato member countries in The Hague, where they are expected to formally agree the target, made up of 3.5% on 'core defence' and another 1.5% on 'resilience and security'. He rejected that tax rises would be needed to pay for higher defence spending. 'Every time we've set out our defence spending commitments, so when we went to 2.5% in 2027/28, we set out precisely how we would pay for it, that didn't involve tax rises. 'Clearly we've got commitments in our manifesto about not making tax rises on working people and we will stick to our manifesto commitments,' the Prime Minister told reporters in the Netherlands. He said the current commitment to get defence spending up to 2.5% of GDP by 2027/8 was not coming at the expense of welfare, but rather from cuts to overseas development aid. 'So, it's a misdescription to suggest that the defence spending commitment we've made is at the expense of money on welfare.' Donald Trump is among the world leaders at the summit, and told reporters on the way to the Netherlands that it would depend 'on your definition' when asked if he would commit to Nato's Article 5, which requires members to defend each other from attack. At a Cabinet meeting on Tuesday morning, Sir Keir underscored that national security is the 'first duty' of Government. His trip comes as the Government publishes its national security strategy, setting out plans to make the UK 'more resilient to future threats'. Downing Street has described the 5% goal as 'a projected target' that allies will review in 2029 when Nato carries out its next capability assessment. It is a significant jump from the current 2% Nato target, and from the UK Government's aim of spending 2.5% of gross domestic product (GDP) on defence from 2027 and 3% at some point after the next election. But the figure is in line with the demands of US President Donald Trump, who has called for Nato allies to shoulder more of the burden of European defence. The Government expects to spend 1.5% of GDP on resilience and security by 2027. The details of what counts towards that target are due to be set out during this week's summit, but it is likely to include spending on energy and border security as well as intelligence agencies. But increasing core defence spending to 3.5% will not happen until 2035, with at least two elections likely to take place before then. The Institute for Fiscal Studies estimates that an increase in core defence spending from 2.6% to 3.5% would cost around £30 billion more a year. It noted however that the plans concern spending far in the future – due in 10 years' time – and therefore may not affect the Government's spending review or autumn budget decisions, but prompt the chancellor to revise plans at the 2027 spending review. Spending 3.5% of national income on defence is 'certainly not unprecedented' but much more is now spent on health than in the past, IFS researcher Bee Boileau noted. Shadow foreign secretary Dame Priti Patel said the Government had not been clear enough about how it would reach the core defence spending goal, claiming ministers had only offered 'smoke and mirrors'. She added: 'So, when will he actually deliver a plan to get to 2%, and why won't he heed our calls to hit 3% by the end of this Parliament, which would be vital, and a vital stepping stone on the way to that higher defence spending that he is seeking.' The Nato gathering comes amid the backdrop of escalating Middle East tensions and the ongoing war in Ukraine. Sir Keir has urged Israel and Iran to get back to the fragile ceasefire brokered by Donald Trump. Ukrainian President Volodymyr Zelensky is expected to attend the summit, but not take part in the main discussions of the North Atlantic Council. Nato secretary-general Mark Rutte described the move to spend more on defence as a 'quantum leap' that would make the organisation 'a stronger, a fairer and a more lethal alliance'. But it was reported on Sunday that Spain had reached a deal that would see it exempted from the 5% target. Prime Minister Pedro Sanchez said that Spain would be able to keep its commitments to the 32-nation military alliance by spending 2.1% of GDP on defence needs.
Yahoo
an hour ago
- Yahoo
Amazon to Invest Around $54 Billion in U.K. to Support Innovation, AI Push
plans to invest about $54 billion in the U.K. over the next three years, expanding its warehouse network and artificial-intelligence infrastructure to bulk up its e-commerce and cloud operations. The U.S. tech company said Tuesday that its investment of 40 billion pounds, equivalent to $54.10 billion, would create thousands of jobs and contribute to the country's economy and AI ambitions. U.K. Prime Minister Keir Starmer called the move a vote of confidence in the country. Lawyers Market Big #MeToo Verdicts, but Their Clients Struggle to Collect Trump's Relentless Fed Pressure Creates Lose-Lose Scenario for Powell Choosing 'Buy Now, Pay Later' at Checkout Will Now Factor Into Your Credit Score The Middle East Is in Turmoil. U.S. Frackers See No Reason to Pump More Oil. The Holy Grail of Automation: Now a Robot Can Unload a Truck News of Amazon's investment came shortly after the U.K. government launched its industrial strategy, a 10-year plan that aims to attract investment in key sectors to drive economic growth. Amazon set out plans for multibillion-dollar investments in several parts of the U.S. and countries like Australia and Taiwan in recent weeks. Most of those outlays seek to bolster its data-center network to meet booming global demand for AI computing. In the U.K., the company is also looking to expand the infrastructure that underpins its core e-commerce operations, by investing in building new warehouses, adding delivery stations and upgrading its transportation network. Amazon said it expects to create 2,000 jobs at a previously announced fulfillment center in Hull that is set to open this year, another 2,000 positions at a new facility in Northampton, and additional roles at new sites in the East Midlands. The investment will also result in additional jobs at delivery stations across the country, the company said. The plan comes after Amazon Chief Executive Andy Jassy last week outlined plans to reduce the company's workforce in the coming years due to the increasing use of AI. Jassy said the efficiency gains from using generative AI would result in cuts, but didn't specify how much the size of Amazon's workforce would be reduced. The company currently employs more than 75,000 people in the U.K. and is a top 10 private-sector employer, it said. Amazon's U.K. investment plan includes part of the 8 billion pounds it earmarked last year for building, operating and maintaining data centers in the country through 2028, it added. The company also plans to allocate funds to original TV and film productions and to redevelop the historic Bray Film Studios in Berkshire. The U.K. government is seeking to spur business investment in sectors like advanced manufacturing, defense, technology and the creative industries. The number of foreign-direct-investment projects into the U.K. declined last year, similar to other leading European economies, but the country continues to be the top destination for tech investments, according to a report by EY published in May. The U.K.'s share of foreign-direct-investment projects in Europe fell to 15.9% last year from 17.3% five years before, according to EY. Write to Najat Kantouar at Iran Has an Oil Card to Play. So Does the U.S. C&S Wholesale Grocers to Acquire SpartanNash in $1.77B Deal Stablecoin World Opens Up to Main Street Banks Ford Still Scrambling to Get Rare-Earth Magnets Stocks Rise and Oil Recedes After Iran's Retaliation Avoids Energy Infrastructure Sign in to access your portfolio
