ALEX BRUMMER: Britain squanders its tech

Britain has the ingredients – including world-class research universities, a robust venture capital industry and fast-improving education – to be a global technology leader.

Still, the resulting mix never quite performs in terms of growth.

The government heralds the UK’s triumph in creating the number three high-tech sector in the world after the US and China with a combined value of £820bn and a record 144 ‘unicorns’ (companies worth at least $1bn) .

But the UK is struggling to take them to the next stage.

Israel is also brilliant at developing new technology and has been called the ‘start-up’ nation.

But with only 8 million residents and a troublesome neighborhood, it’s no surprise that world-class technology, such as the navigation app Waze, ends up in Silicon Valley.

The UK has no such excuses. Arm was sold to Japanese investor Softbank. Fintech champion Worldpay (who started his life at NatWest) is part of the American financial conglomerate Fidelity National, after several billion-dollar deals.

Satellite pioneer Inmarsat will be swallowed up by US rival Viasat and Cambridge-based industrial software company Aveva has been bought by France’s Schneider.

Vodafone, pioneer in mobile telephony, is a global minnow. For all of Britain’s engineering excellence, there is a lamentable failure to follow the great example of Britain’s big pharma or create anything close to a Silicon Valley giant.

Recent work from McKinsey suggests UK companies are slow to adopt AI and digital technologies that could provide a productivity boost that would drive growth and real rewards for the workforce.

At the heart of the current Royal Mail and railway disputes is a Luddite response to industrial change.

But, as the new Elizabeth Line demonstrates, the customer experience and output can transform when the latest software and electronics are embraced.

Bravo to the unicorns for creative thinking and innovation powering British technology. Unfortunately, too much of intellectual property escapes the grasp of the nation.

due process

When Kwasi Kwarteng delivered his disastrous mini-Budget in September, all hell broke loose.

The criticism from the political claque, the IMF and the markets was that the then chancellor failed to submit his unfunded proposals to scrutiny by the independent Office for Budget Responsibility. The process was not followed.

Pay agreements in the public sector are regulated by a similar independent process of the Pay Review Bodies.

The Institute for Government (IFG) defines them as non-departmental public administrations that each year collect evidence and advise the government on compensation for public sector colleagues.

Ministers do not have to adopt the advice, nor do OBR forecasts. As the IFG points out, the government has adopted many of the recommendations this year, ranging from the armed forces to the NHS.

Admittedly, when the proposals were made, inflation was rising, but had not yet reached double digits.

The £1,400 increase for NHS staff on ‘agenda for change’ contracts, along with previous 4 per cent increases, could be seen as mean.

But that shouldn’t have been a green light for nurses or paramedics to head to the picket lines and potentially endanger lives.

The place for settling disputes is the Acas Disputes Committee. RCN leader Pat Cullen’s demands to “sit down” with Rishi Sunak are unauthorized.

Public sympathy for nurses and ambulance workers (as opposed to railway workers) is a given. Circumventing due process is a recipe for chaos and political disorder, Kwarteng and Liz Truss discovered.

Unfunded wage agreements, if not accompanied by productivity gains, lead to more borrowing and can lead to higher taxes and interest rates.

Setting sun

They do things differently in Japan, the land of negative interest rates and a debt-to-GDP ratio of 266 per cent (compared to the UK’s 90 per cent).

In a month when other major central banks raised short-term interest rates by half a percentage point, outgoing Bank of Japan governor Haruhiko Kuroda raised the yield target on the 10-year bond from 0.25 percent to 0.5 percent.

The move sent a shiver through bond markets and the yen rallied.

The change will improve returns for banks and insurers and boost the currency. It is the lightest push of a button for a country that has been living with negative interest rates for six years. Sayonara.