GROWTH WILL COME IF WE TARGET THOSE WHO WILL BRING INVESTMENT
As Keir Starmer and Rachel Reeves reach for new initiatives to help spur investment, they must urgently free up the path to UK residence and taxpaying by individuals who are statistically insignificant when it comes to migration figures but who could make a huge difference to our position in tech and AI development. As the political rhetoric on immigration is dialled up, and my Party proposes more curbs on migration, Britain must become a more attractive place for foreign direct investment and for those investors who wish to be made welcome here.
The Government’s new AI Action Plan is a bold response to Matt Clifford’s excellent Review, but it cannot be achieved by government alone. Private investment, which is driving AI development across the world, is what is needed. The UK must become a key destination for those who want to invest in technology. As we have seen this week, a Chinese start-up LLM has threatened the hegemony of US big tech developers in a way that no-one foresaw. It could be that only a few millions separate the UK from becoming a true leader in the field, as opposed to being in the middle of the pack, as the revelations about China’s small start-up DeepSeek LLM are demonstrating.
Here are some ideas:
A new investor visa could be developed to allow investments limited to finance for UK firms pursuing AI technologies, or simply in tech businesses.
We could expand the Global Talent Digital Technology visa sub-category, so that established investors who are able to demonstrate a long track record of making successful investments would be able to use it
We could restrict the nationalities of those who are able to come to the UK on a new investor visa to minimise risk.
It is GDP per capita that is the most accurate indicator of economic success. Investor migrants could increase both headline GDP and GDP per capita, by encouraging THE growth of UK businesses employing UK residents and boosting UK tax revenues in the process.
The Government’s AI plans sit at odds with their tax policies for individuals, in particular wealthy foreigners who are looking for opportunities in the sector. Rachel Reeves’ October 2024 Budget has seen many wealthy investors leave the UK and the feedback from those seeking legal advice is that they no longer feel welcome in a jurisdiction where punitive (and often complicated) tax laws make investment unattractive and punish growth and entrepreneurial success.
It is true that there continue to be options for tax efficient investments such as through the Enterprise Investment Scheme and Venture Capital Schemes and R&D tax reliefs for companies, but if AI is to be ‘unleashed’ in the UK, there has to be an incentive both to those working in the sector and those investing into the sector, and at present those incentives are not evident.
With a combination of new specialised visa routes and a tax regime that does not deter those who want to invest in UK AI, then the ambitions in the AI Action Plan can truly be realised.
Rt Hon Sir Robert Buckland KBE KC is Senior Counsel at Payne Hicks Beach and former Lord Chancellor
