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Newport, Wallis – British Chancellor of the Exchequer Jeremy Hunt attended the Welsh Conservative Party’s 2023 Spring Conference on April 28, 2023 in Newport, Wales.
Matthew Horwood | Getty Images News | Getty Images
Britain has announced plans to secure the opening of billions of pounds of pension fund funds to invest in early-stage companies, in a bid to boost economic growth amid criticism that the UK is becoming an unattractive place for technology.
In a speech late Monday, Britain’s finance minister, Jeremy Hunt, outlined a raft of reforms that he said would boost earnings for retirees by £1,000 ($1,283) a year by allowing them to reap long-term returns from investments in private startups. .
Among the measures introduced by the government is an agreement between the country’s largest providers of defined contribution pensions to allocate 5% of the assets in their virtual funds to unlisted equities by 2030.
Hunt said this could unlock up to 50 billion pounds (about $64 billion) of investment in high-growth companies if all defined contribution pension plans follow through.
Meanwhile, pensions for average earners could rise by up to 12% to £16,000 as defined pension plans commit to more efficient investments, he said.
The UK has the largest pension market in Europe, worth more than £2.5 trillion.
“We want to be the world’s next Silicon Valley and scientific superpower, embracing new technologies like artificial intelligence in a way that brings together the skills of our financiers, entrepreneurs, and scientists to make our country a force for good in the world, while leading the way to AI security,” it was set to Hunt says in his speech at Mans House, according to prepared remarks shared with CNBC by the Treasury Department.
“This means ensuring that our financial services sector, which has traditionally been nimble and agile, has the right structure to provide the best possible security for investors as well as capital for businesses, and the best talent here in the UK to make this happen.”
Hunt has also committed to a “slick trading venue” that allows public market investors to trade stocks of unlisted companies. This would be a halfway house for privately traded companies looking for alternative ways to raise capital to public listings.
UK technology record under fire
It comes after criticism from prominent tech voices that Britain has become a less attractive place for tech companies to do business.
Microsoft Chairman Brad Smith said confidence in the technology in the UK had been “severely shaken” after regulators blocked the company’s acquisition of video game publisher Activision Blizzard. Meanwhile, Revolut’s CEO, Nikolai Storonsky, said he would “never” list in London due to an unfavorable tax system and bureaucratic regulations.
Separately, after much pressure from UK officials, chip design firm Arm has chosen to list in the US rather than Britain. It was a major blow to the country’s ambitions to become a global destination for big tech IPOs.
“From a personal point of view, I can see a lot of the potential benefits of technology in the UK,” Will Wynn, co-founder of Smart, an online workplace pension platform, told CNBC. “We… see this as an opportunity for others to gain support for similar success.”
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