A method for Labour to release funds is by utilizing pensions’ influence and directing more of their resources towards venture capital to bridge the gap in Series A financing, according to Edward Prior, the head of investor services at an early-stage VC fund called SFC Capital. He contends, “UK startups have more US pension fund investment than UK pension fund investment.”

“While we strive to be the finest place to establish a business, which we currently excel at on a global scale, we also need to become the best destination for business expansion. We are forfeiting a significant portion of our economic value during the scaling-up phases due to inadequate funding beyond Series A,” he added.

To address the funding gap, the new administration may consider adopting and reinforcing some of the previous government’s programs. Labour’s manifesto did not mention any modifications to the Conservative’s EIS (Enterprise Investment Scheme), SEIS (Seed Enterprise Investment Scheme), and VCT (Venture Capital Trust) tax incentives. However, VC funds emphasize the significance of preserving these initiatives to enhance the startup ecosystem.

Russ Shaw CBE, the founder of Tech London Advocates & Global Tech Advocates, a startup support community, identified the primary challenge as funding for companies striving to achieve unicorn status. He also underscored the talent pipeline issues, which Labour could tackle by addressing the complex matter of immigration.

“Although the Scale-Up Worker visa and the Global Talent visa are beneficial, the process that candidates have to undergo is fundamentally flawed,” Shaw noted.

Alan Chang from Fuse Energy, a sustainable energy firm launched two years ago, mentioned the significant hurdles his company encountered when recruiting talent from overseas to the UK. This issue, according to Chang, necessitates Labour’s intervention in streamlining the acquisition process for high-skilled worker visas, making it more accessible, faster, and cost-effective. “In my circle, I know numerous successful individuals who have either left the UK or are contemplating doing so,” he elaborated.

Eliminating the immigration health surcharge by Labour—an annual levy of approximately £1,000 ($1,276) for workers—would render the UK a more appealing destination for skilled professionals, suggested Zach Meyers, the assistant director for the Centre for European Reform. “The immigration surcharge appears somewhat unreasonable as it essentially acts as a tax on migrants. Removing it could substantially address the skills shortage,” Meyers opined.

Additionally, the new government should consider unlocking the £250 billion of fresh value identified in the 2019 Alison Rose Review by properly supporting women similar to men. Emma Wright, a partner at the UK law firm Harbottle & Lewis, co-leader of the invest-HER initiative, and director of the Interparliamentary Forum on Emerging Technologies, highlighted that only 2 percent of VC funding is directed to female entrepreneurs. She stressed the importance of providing transparency on the allocation of investment funds, noting the potential benefits in terms of addressing social mobility or regional funding, as well as exploring additional economic opportunities.