October 27, 2020

Coronavirus: UK tech sector begs for help – but does it need it?

The UK’s high-growth tech companies say they need help from the government to get through the coronavirus crisis – and at the moment they are not getting it.

That was the message of a letter to the chancellor from 12 leaders of some of the country’s best-known tech businesses.

They include Babylon, Citymapper, Deliveroo and Improbable.

But just hours after the letter arrived at the Treasury, there is confusion about what it intends to achieve and some criticism – even from within the tech sector – of an appeal for government money from firms that may not actually need it.

The letter spells out the problem:

there are three main schemes whereby help is being funnelled to British businesses
high-growth tech firms, which may not make a profit for years, do not qualify for any of them
either the schemes are aimed at small businesses and the tech firms are already too big
or they require an investment-grade credit rating, which a new fast-growing firm would not typically have and might take months to acquire
In summary, they maintain that every kind of business from the family butcher to old established corporate giants is getting help – but the very companies on which the UK’s hi-tech future depends are being left to founder.

The letter asked for a taskforce to sort this issue out. But the people behind it admit they have not quite worked out what an acceptable rescue scheme might look like.

Nevertheless, the Treasury seems sympathetic.

“We are working urgently in government and with the venture capital finance sector to assess these issues and consider how to best support them,” said a spokeswoman.

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