Saturday 06 June 2026 15:54
The government is preparing to take bigger stakes in Britain’s fastest-growing companies as Peter Kyle steps up Labor’s efforts to turn the country into a more active supporter of private enterprise.
Ahead of London Tech Week, the Business Secretary said that ministers would be more willing to share tax money with private investors, arguing that the government needs to take bigger risks if the UK is to retain its most successful technology companies.
“You will start to see us taking more risks,” Kyle told The Sunday Times. “I want us to be aggressively ambitious.”
The comments signal a significant shift in Labour’s industrial strategy, with ministers increasingly focused on helping home-grown start-ups to grow into billion-pound businesses rather than watching them move overseas or list overseas.
The move comes as London re-establishes itself as Europe’s leading tech hub, overtaking Paris following a surge in AI investment and a re-entry of global capital.
According to Dealroom, startups in the capital raised $17.7 billion (£13.3 billion) last year, while AI investment almost doubled to $7 billion as companies including OpenAI and Anthropic expanded their presence in the UK.
But ministers remain frustrated with Britain’s track record of producing world-class companies, but many of them are developing in other countries.
Cambridge chip designer Arm remains the most prominent example. The company is registered in New York rather than London and is now worth about $370 billion.
Kyle said government support must come through more active partnerships.
“This government will not remain silent from the business world that we support,” he said.
Bet on high growth UK companies
The Business Minister’s vision is for Whitehall to not only offer grants and tax incentives, but also become a more involved investor in high-growth companies.
Recent examples include a £25 million investment into Kraken, the technology arm of Octopus Energy, and another £25 million commitment through the British Business Bank to self-driving technology company Wayve.
Kyle argues that when the government invests in a company, it must also help remove bureaucratic obstacles that hinder growth.
He cited Wayve, where officials have reportedly intervened to help overcome regulatory hurdles even though the law already allows autonomous vehicle trials.
This approach reflects growing concern within government that the UK is excelling at creating innovative companies but is struggling to provide the capital and support needed for them to become global champions.
The push also comes as ministers seek to showcase a more interventionist growth strategy amid fierce international competition in technology investment.
Governments across Europe and North America are increasingly willing to deploy public funds to support strategically important sectors such as AI, green technology or defense.
Britain has faced criticism from business groups in recent months for moving too slowly in some sectors.
A survey published last week by TechUK found that 73 percent of dence technology companies said market conditions had worsened over the past year, while almost nine in ten reported funding delays or reductions related to uncertainty over the government’s investment plans.
Kyle appears determined to avoid similar complaints from the UK tech sector.
Government sources say ministers are also exploring a concierge-style service that would provide a single point of contact for fast-growing companies within Whitehall to help navigate regulations and get support.
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