EXCLUSIVE: Fintechs react – Jeremy Hunt’s Autumn Statement 2023

The Chancellor of the Exchequer, Jeremy Hunt, has delivered his Autumn Statement for 2023 with a focus on delivering 110 pro-growth measures for the British economy. The Chancellor has pledged to “turbo charge” growth but what does the fintech industry think? We asked a selection of leaders from across the industry about various topics from today’s Autumn Statement…

Babs Ogundeyi, Group CEO and Founder, Kuda: “It’s disappointing that there was no mention of closer ties between innovators and regulators, which would have allowed fintech a seat at the policy table. With the rise of mobile commerce, digital wallets are set to dominate online payments next year, underscoring fintech’s escalating significance. However, it is likely that we’ll see fintech startups working to consolidate the Government’s plans to create a pension pot for life.”

Khalid Talukder, Co-Founder of DKK Partners, commented: “The UK has its sights set on becoming a technology superpower, and the measures from today’s Autumn Statement can empower businesses to lead innovation and make the UK an attractive destination for technology development. The tech and FinTech industries in particular will act as powerhouses for economic growth, facilitating overseas investment and international trade, driven by forward-thinking start-ups and SMEs. The payments sector, especially, is seeing large growth, and further developing the technology to connect the UK to emerging markets can open up a whole new world for businesses to trade, collaborate and innovate.”

Myles Milston, co-founder and CEO of Globacap commented: “Today’s announcement means that a huge amount of extra capital will be available for VCs in the UK to invest in high-growth industries such as the tech sector. These VCs will then have to deploy this capital which means finding more investment opportunities, taking more risks and investing in more early-stage companies. Over time, this will be really positive for the startup and innovation ecosystem in the UK, enabling entrepreneurs to access funding earlier in the cycle and accelerate their businesses quicker, similar to how the VC landscape currently works in the US.

Historically, investors like pension funds have battled with laborious, manual and time-consuming private market transactions which often take weeks or months. However, over the past decade, private markets have increased funding, boosted liquidity and embraced automation and technology, making them far more accessible and an attractive alternative to public markets.

The UK is the number one tech hub in Europe by some margin, and number three in the world, boasting a tech sector with a combined market value of $1tn. Encouraging pension funds to invest in fast-growing tech firms will not only give the industry a boost, it also gives UK pensioners the opportunity to profit from UK tech innovation.”

Martijn de Wever, CEO and founder of Floww – “The latest announcement from the Chancellor and the British Business Bank is great news for scaling companies in the high-growth tech sector. The UK is a leading force in European technology and innovation, and for us to continue to lead and compete, we must commit to increasing levels of investment. We certainly want to avoid any red tape that might slow the flow of capital into the sector, so I would urge all involved in the Mansion House Reforms to consider how technology can play a role in expediting investment so that UK tech continues to lead the way and scale faster.”

Peter Keenan, CEO of APEXX Global comments: “The measures announced yesterday and confirmed today in Jeremy Hunt’s budget, such as the new Venture Capital fellowship scheme, are a really exciting development for the UK fintech space. By training more specialised investors and funnelling funding towards high-growth tech firms, the government is proactively nurturing future innovation in digital payments and embedded finance. We could see even more creative applications leveraging open banking APIs, including new lending platforms, and an all-round better payments experience. Whether it’s streamlining business-to-business transfers, enhancing digital wallets and cash apps for consumers, or reducing friction in ecommerce checkouts, this increased investment could unlock the tremendous potential to accelerate settlement times and make money movement instantaneous.”

Simon Merchant, the founder & CEO of Flagstone says: “What UK savers urgently needed to see – and didn’t – in the Autumn Statement were a bit more cautious optimism about our future personal finances and a harder commitment to tackling the issue we’re seeing of more people paying higher taxes on their savings on account of interest rates rising while tax thresholds stay put. Specifically, we wanted to see the Treasury raise the threshold on the Personal Savings Allowance that would mean fewer hardworking savers forced to pay tax on their hard-fought savings.

As a nation we don’t save enough as it is and a huge proportion of what is saved languishes in uncompetitive accounts earning customers next to nothing. Fintech players in the cash deposit space must keep pushing hard to challenge and disrupt this status quo. We must keep innovating to find ways to encourage more savers to put more of their hard-earned cash into savings accounts.

Already challenger and neo-banks are leading the way to provide competitive rates on a rate of savings accounts – from easy access instant access to fixed terms lasting multiple years. Incumbent banks will have no choice but to follow suit if they want to maintain their positions in the sector. But more needs to happen, and fast. The more we enrich rather than impede the savings experience, the greater levels of attention and action savers will gain from the government.”

Dominic Rowles, lead ESG Analyst, Hargreaves Lansdown: “While tax cuts took centre stage in Jeremy Hunt’s Autumn Statement, some efforts were made to enhance the Government’s patchy record on sustainability. They are a welcome response to a series of recent policy shifts that seemed to pose serious challenges to the Government’s 2050 net zero target.

Among the top commitments were an initiative to introduce a cash sweetener of up to £10,000 over 10 years for those living closest to new energy generation and transmission infrastructure. It’s hoped this plan will speed up planning approvals for new infrastructure projects, which have been beset with delays and increased costs in recent years.

The Chancellor also restated his commitment to invest £4.5bn between 2025 and 2030 in strategic manufacturing, which includes £2bn for zero emission investments in the automotive sector, supporting the manufacturing, supply chain and development of zero emission vehicles. This could go some way to placating those automakers that needed to alter their investment plans when the government delayed plans to prohibit the sale of new combustion engine-powered cars in September.

There will also be £960m for a new green industries growth accelerator to support clean energy manufacturing including offshore wind, nuclear, Carbon Capture & Storage and hydrogen.”

Jonathan Moyes, Head of Investment Research at Wealth Club commented; “The world’s most sophisticated investors, from endowment funds to sovereign wealth funds and family offices have long understood the benefits of investing in private markets as part of a diversified portfolio. With companies staying private for longer, much of the world’s growth and innovation is accruing in private hands. The decision to allow Long-Term Asset Funds within an ISA provides investors with the potential to gain exposure to this growth, in a tax efficient manner.

The move also promises to breathe new life into the ailing Innovative Finance ISA. Latest data shows a mere £144 million was invested into Innovative Finance ISAs in 2021/22, a shadow of its former self and just 0.2% of all ISA subscriptions. The drop in interest is understandable. Once associated with peer-to-peer loans, the innovative finance ISA has a short but chequered past.

The inclusion of LTAFs should see the wrapper become a more compelling option for wealthy investors.”

Kris Krupecki, Commercial Director at Ampere: “We welcome Chancellor Jeremy Hunt’s confirmation that the Mansion House reforms will be implemented, including the Venture Capital Fellowship program, showcasing the government’s commitment to bolstering the growth of the UK’s tech sector. As an SME-focused neobank, we know the difference that slick and efficient technology can make to how a business operates, and believe that programs like this are instrumental in building a resilient ecosystem that can drive breakthroughs and provide the necessary support to SMEs that seem to have been forgotten in the past year.”

Aidan Rushby, CEO and co-founder of Carmoola, the UK-based direct-to-consumer digital car finance fintech, said: “The new science and technology scheme could be a game-changer for tech companies. Having UK-based venture capitalists who are trained and focused on understanding the particular needs of science and tech startups will surely open up more avenues for investment in innovative UK companies.

This should also be a significant step towards bridging the gap between groundbreaking research and commercial success, which has been a longstanding challenge in the UK tech sector. For founders, this means not only more funding opportunities but also a deeper pool of investors who understand the unique needs and potential of tech-driven businesses. It’s an exciting time for UK tech, and there are start-ups here that are truly among the most innovative, with commercially robust business models, and access to more support can only help to accelerate the impact that the UK’s technology sector can have globally.”