Jeremy Hunt has quite a job to do in next week’s budget.
The Chancellor plans to boost morale with high-flying rhetoric on Britain’s world-leading achievements in life sciences, deep tech, AI, fintech and more.
It will do so against the turbulent backdrop of Arm, commercial lender OakNorth and struggling data group Wandisco deciding the grass is greener on the other side of the Atlantic.
Challenge: Chancellor Jeremy Hunt plans to boost morale with high-flying rhetoric on Britain’s world-leading achievements in life sciences, deep tech, AI and more
It’s just the tip of an iceberg. As we learned during the pandemic (no exaggeration). Britain is truly a world leader in biotechnology, vaccine development and new drugs.
Many UK discoveries turn into start-ups and then rush through the first stage approval of the regulatory process. This indicates a prospect of success.
Then the fun begins with small biotechs looking for direct funding and big pharma looking for licensing deals to capture the new treatments or compounds.
Realistically, this is a random process with only a one in ten chance of success.
Nevertheless, the competition is hot and, as a biotech lawyer told me this week, at this point you can almost hear the sound of big science, being developed in UK universities, heading to Stanford and the west coast the United States.
American venture capitalists are so much more willing to take risks than British funders. It’s such a shame because, as vaccine heroine Kate Bingham noted, the NHS could be a fantastic test bed for genetic treatments, digitalisation, AI and much more.
Many of our best-known growth companies are university spin-offs, including Arm, Aveva, Darktrace and Oxford Nanopore.
It is good that HM Treasury recognizes this and that the Chancellor has set up a task force to identify “best practices” for turning academic research into commercial success.
This seems to be typical of Whitehall, with civil servants, as Bingham observed, focused on process rather than results.
Of course, there is plenty of room to turn academic research into greater commercial success.
This sort of thing is already happening with Russell Group universities such as Southampton. He created a huge science center where dozens of innovations were turned into companies.
M&G seeks to be a pioneer in this area through Northern Gritstone. Its £5bn Catalyst fund is open to outside investors for the first time and is hungry for investment targets.
Conservative voices, such as Lord Leigh of Cavendish Corporate Finance, argue that if the UK is to truly become a beacon for start-up funding, mechanisms such as the Business Benefit Tax Investment Scheme need to be modernized. and extended.
The government still lives in fear of fiscal turmoil after the Truss fiasco last fall.
But the UK cannot regain its mojo without generous tax breaks and a shift in attitude from defensive domestic investors towards more venture capital. Leaving that to the Americans should not be an option.
A swiss watch
US regulators are quick to punish foreign banks. HSBC and Standard Chartered have both been sanctioned in the past for money laundering and failing to comply with sanctions.
Credit Suisse’s problems are of a completely different order. The Securities & Exchange Commission intervened exceptionally to prevent the publication of the report and the accounts of the bank in difficulty.
He doesn’t trust the cash flow numbers for 2019 and 2020.
The net effect of errors may not be significant, but the requests from the main US regulator on Wall Street do not bode well.
Earlier this week, the bank’s largest investor, Harris Associates, sold its stake and shares fell another 5% in recent trades.
The Swiss bank’s objective is to stem outflows and focus on its wealth management skills. The latest events can hardly be called confidence building.
Survival techniques
Nothing is more important to Jamie Dimon and JP Morgan than the “white shoe” reputation of Wall Street lenders.
In turning the tables on former Barclays chief executive Jes Staley over his links to sex offender Jeffrey Epstein, he clearly decided that some of the allegations and published testimony, following legal action, were too toxic. to be left in abeyance.
It’s not for nothing that Dimon has survived at the top of JP Morgan since 2005, a period encompassing the Great Financial Crisis.
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