Alan Mak is a former Treasury and Business Minister, former Shadow Science & Technology Secretary, and Conservative MP for Havant.
Conservatives understand the fundamental truth about national success: prosperity and power come from those who build.
Not just those who invent, discover or design – but those who invent, build and scale. We can see from our own Industrial Revolution that it’s the nations that master the art of building and scaling world-leading businesses and industries that shape the future. Those that do not end up being shaped by others.
That’s why the Chancellor faces a choice at the Budget that will define Britain’s economic future. Will we be a country that founds brilliant companies only to watch them grow and scale elsewhere? Or will we become a ScaleUp Nation, a country that turns invention into industries, breakthroughs into jobs, and ideas into long-term entrenched economic and strategic advantage?
The Conservatives turned the UK into Europe’s startup capital. And we are still second only to the United States when it comes to tech innovation. But the hard truth is this: we have not yet become a nation that scales its best firms so they stay in this country rather than seeking growth abroad. In the last few years alone, Britain has lost too many promising companies, such as ARM, DeepMind and Solexa to foreign buyers and overseas listings. The ideas were British to begin with – but the value, jobs and strategic advantage now belong to foreign competitors.
What a ScaleUp Nation really means
A ScaleUp Nation is one that not only encourages and nurtures creativity and invention but one that has the capacity, infrastructure, institutions and capital to build national champions at home. In the 19th century, the countries that mastered coal, steel and steam shaped the first industrial age. In the 20th, it was those that controlled oil, electricity, the internet and aerospace.
As the first quarter of the 21st century comes to an end, power now flows from scale in semiconductors, artificial intelligence, big data, biotech, quantum, advanced manufacturing and clean energy. These sectors do not reward innovators alone. They reward nations that can mobilise talent, capital and political will at a sufficient scale and speed that turns breakthroughs into dominant market positions.
Today over 90 per cent of the world’s most advanced semiconductors are made on a single island: Taiwan.
One sovereign wealth fund in the Gulf – Saudi Arabia’s PIF – wrote a single $45 billion cheque to SoftBank’s Vision Fund, more than twice what Britain spends on science in a year. And by 2030, AI will add $15.7 trillion to the global economy, more than the current GDP of Germany and Japan combined.
These facts illustrate a simple truth: the global race is not about who invents things first, but who scales them fastest. And Britain must decide which side of that divide we want to be on.
Where Britain must do better
The UK has world-class universities, extraordinary entrepreneurs and a thriving startup ecosystem. But we hit problems when our firms want to grow. Three issues dominate every conversation I have with high-growth founders and investors, including in my role as Shadow Technology Secretary:
First: domestic capital is too shallow. US pension funds and institutional investors back their national champions from seed to scale. Britain’s pension system invests less than 1 per cent of its assets in high-growth UK firms, compared with 10–20 per cent in Canada and Australia.
Second: our best firms are pulled overseas. Founders tell me they feel they must choose between selling early, moving abroad or listing in New York if they want access to deep, patient, risk-tolerant capital. London’s listing environment has improved, but not enough.
Third: delay is now our biggest foe in a world where technology and capital move fast. The Mansion House agenda was a Conservative reform designed to correct structural imbalances in our capital markets. Labour has adopted the language but not the urgency. A deadline of 2030 for full implementation does not work for companies needing capital today.
Why this Budget matters
This Budget is not just an isolated economic event. Coming on the back of so many economic failures since Labour took office, next Wednesday is now the moment where the Chancellor signals whether Britain intends to be a serious competitor in the industries of the future, or whether we are content to remain a nation of inventors while others become the builders and scalers.
That is why I have written to the Chancellor with five practical steps to put Britain firmly on the path to becoming a ScaleUp Nation, backed by more than 20 other Conservative MPs from tech entrepreneur and former Chancellor Jeremy Hunt and other former Cabinet Ministers to members of the new 2024 intake with experience of tech and financial services. These are the five reforms the Chancellor should adopt at the Budget:
- Create a Tech ISA to give savers a stake in Britain’s economic growth.
Let people invest directly in high-growth UK tech firms, unlocking part of the £300bn currently sitting in Cash ISAs earning little real return.
- Launch British Growth Capital.
Abolish the National Wealth Fund, consolidate existing pots of government funding for tech growth and direct them into a single focused investment vehicle partnering with the best private-sector venture funds – crowding investment in, not crowding it out. - Modernise the Enterprise Management Incentive (EMI) scheme.Raise the 250-employee and £30m fund-raise caps and extend eligibility beyond ten years so Britain’s scaleups can attract and retain top global talent with better financial incentives.
- Introduce a five-year Stamp Duty holiday for newly listed UK tech stocks.Stop penalising British firms who want to list in the UK by making London’s stock exchanges a magnet for growth-stage firms again, so they don’t look abroad.
- Accelerate the Mansion House Reforms. Bring forward pension fund investment into UK high-growth companies from 2030. Countries like Canada, Australia and Singapore are already mobilising capital at scale. Britain cannot afford to be late.
ScaleUp Nation is a Conservative agenda – and Britain needs it
For all Labour’s rhetoric about being “pro-business”, the truth is they fundamentally do not understand what it means to be so. A modern economy needs to be pro-scale – committed not just to enabling commerce, but to building national champions and capturing strategic advantage.
That requires decisions, not delays. It requires political will, not warm words. And it requires a belief – which Conservatives have always held – that Britain’s prosperity is built by those who combine innovation with investment and the hard work needed to grow their enterprises from startups to scaleups.
Becoming a ScaleUp Nation is not a slogan. It is an economic strategy for the next 10, 20 and 50 years. It is how Britain competes with the US, China and the EU. And it is how we ensure that when a founder in Cambridge, Manchester, Belfast, Cardiff, Edinburgh or elsewhere in the UK builds a world-leading company, it remains British – creating jobs, value and influence here at home.
Next week’s Budget is the Chancellor’s opportunity to show Britain intends to stay in the race, and win.
I hope she takes it.
