Well that was fast. Liz Truss has officially become the shortest serving prime minister in the history of the UK. She called it quits after just 44 days in power, 10 of which were spent in a period of national mourning for Queen Elizabeth II. As such, she has beaten George Canning who only held the position for 119 days before he died in 1827. The record is one of the few accomplishments Truss can claim from her brief period in office.
However, that may not be something to be proud of, given that her other accomplishments includes being so unrecognisable that reporters couldn’t identify her during the Queen’s funeral, having to U-turn on her own policies after Kwasi Kwarteng’s mini-budget hurled the British economy into chaos, taking part in an incredibly ill-conceived attempt to clean up her track record by willingly subjecting herself to an hour of local radio hosts berating her over her policies, seeing her home secretary resign due to a cybersecurity snafu, and failing to outlast the shelf-life of a lettuce.
Nevertheless, she’s out after six weeks and another Tory leadership contest is afoot. The new race is expected to be significantly shorter than the two months of campaigning endured by Britain this summer. Graham Brady, chair of the 1922 Committee, has said that the leadership race will be concluded by October 28.
The UK’s tech community’s reaction to the resignation of Truss has been a mixed bag so far. Some hope it will mean a new beginning and much-needed financial stability, others are more sceptical, fearing the uncertainty of what comes next.
“Liz Truss stepping down signals an end of a catastrophic few weeks with the economy being beaten down by the now former PM’s ‘growth plan,’” William Marsters, senior UK sales trader at trading platform Saxo, tells Verdict. “Though many will be glad to see the back of Trussenomics, the announcement of a Tory leadership contest next week leads to more uncertainty on who could be next in Number 10.”
What does Liz Truss’ resignation mean for the UK’s tech community
The UK’s tech industry is huge. Earlier this year, the country celebrated becoming the third nation ever with a tech industry worth over $1tn. The other two are the US and China. While some grumbled that the country would’ve passed the milestone earlier if it hadn’t been for Brexit, there is no denying that capital has flowed into Britain en masse over the last decade.
Back in 2012, the UK tech industry attracted $96m across 98 venture financing (VC) deals, according to data from research firm GlobalData. Those figures jumped to $25.1bn across 1,339 VC deals in 2021. So far, the tech industry has raised over $14.6bn across 977 deals in 2022.
However, the market volatility caused by Trussonomics stoked fears among the tech community about Britain's ability to keep the flow of capital going. With Truss tendering her resignation, some tech watchers now hope investors will keep their faith in the UK's position as an innovative hot bed.
“[Looking] at Truss' resignation, and her short tenure, we're really looking at what confidence investors have in this market," Gianni O'Connor, founder at tech developer Go Games, tells Verdict. “I hope that this is seen as a change that is going to be positive, to get somebody that people are more confident towards, who introduces better economic policies that hopefully lead to more confidence in the market, eventually leading to more investment for startups. Economic confidence is the primary thing that everyone wants right now, and especially in the tech industry because the projects are so research and development focused.”
Russ Shaw, founder of industry advocacy groups Tech London Advocates and Global Tech Advocates, echoes that sentiment.
"Let’s hope that the prime minister’s resignation brings stability to the UK economy and the financial markets – it is vital that the new PM moves swiftly to articulate a vision for the UK, which incorporates a focus on supporting businesses and a thriving UK tech sector.
“There is an urgent need for the next leader and their government to address immediate challenges to underpin the growth of the UK tech sector – these include a plan to build a digitally-equipped diverse workforce, the introduction of a UK semiconductor strategy, clarity around the Online Safety Bill and an environment which supports investment in UK tech.”
While there is a slight sense of optimism among the tech community following Truss tendering her resignation, business advisory Trachet CEO Claire Trachet cautions that the British tech sector "remains in very uncertain waters."
“The pound will stabilise following the sharp drop caused by Trussonomics, although this isn’t likely to happen soon, meaning UK tech companies will continue to be prime targets for investors until then," Trachet tells Verdict. “We won’t see a new normal in terms of investment behaviour until at least June of next year when people will regain confidence."
Many industry watchers and stakeholders hope that Truss quitting will herald some much needed stability.
"We need a stable government that can provide reassurance to both the markets, and also the business sector," Max Sheridan, managing director at medtech manufacturer Algeos, tells Verdict. "We need to increase confidence in the government of today in order to boost investment and job creation."
Sheridan adds: "I don’t remember a time when there were so many variable issues affecting our daily lives, especially economically, and I feel small businesses and households need more support than ever before to help survive over the next six months, especially as we are in the midst of a recession. [We] need stability in order to move forward."
Tech community hopes government goes back to governing
With Truss giving up the keys to Downing Street, the UK tech community hopes that the government can get back to running the country and legislate to protect both businesses and people.
"This political disruption has put the progress of key legislation on hold," Adnan Chowdhury, UK policy lead at fintech company Wise, tells Verdict. "While there are many things in financial services that could have moved on, which would have significantly helped consumers during a time of economic crisis, none was more urgent than the Online Safety Bill.
"The UK's scam and fraud pandemic has been dwarfed by the chaotic government in place, and it's legislation that needs to be active as soon as possible to strengthen consumer protection in this country. We need a stable government to start making strides in areas like these, that affect huge numbers of people in the UK every day."
Matthew Hodgson, CEO of secure British messaging app Element, echoes that sentiment, but hopes that whoever becomes the fifth UK prime minister in six years will give the proposed law a complete overhaul.
“There's an opportunity to fix the utterly flawed Online Safety Bill," Hodgson tells Verdict. "If it goes through in its current form, businesses and consumers should be worried. Ambiguous definitions allow the government to fine any business they have decided is not following rules that are, quite simply, impossible to follow. Threatening to jail founders [and] directors unless they surveil all their users for ambiguously defined 'harmful content' is utterly dystopian and sets the UK's tech economy back about 30 years."
He also called on whoever becomes prime minister after Truss to tear up the bill's proposal to weaken end-to-end encryption "under the guise of protecting consumers against CSAM and terrorist content", arguing that creating any type of backdoor will make "the world less safe for good actors".
Similarly, cryptocurrency enthusiasts hope that whoever picks up the keys to Number 10 will be more supporting of the nascent industry.
"The lack of action, vision and support given to the digital assets industry by Liz Truss and her cabinet during her short time in office was certainly a cause for concern," Alan Vey, chairman and founder of blockchain business Aventus, tells Verdict. "Perhaps most importantly, the increasing value that resides in the digital domain calls for proper regulatory methods to protect consumers – this resignation brings renewed hope that the next person to fill the post will at least make some strides towards regulation in this arena."
Henry Humphreys, founder and managing partner of tech law firm Humphreys Law, concludes that he hopes that the new resident at Number 10 will be serious about ensuring that Britain takes a leadership position when it comes to technology.
“The UK government has been in a shambolic state for some time now and the UK tech scene and much of the wider economy has just carried on in the background, increasingly distanced from what has been going on in Westminster," he tells Verdict. "Whoever the next prime minister is will be loath to replace Jeremy Hunt (who has been steady thus far) and won’t want to announce yet more budgetary U-turns – but it’s probably general election time. The sad conclusion is that in tech the UK’s David continues to battle the twin Goliaths of the US and China, but does so with one hand tied behind its back in the absence of top down support from the government.”
GlobalData is the parent company of Verdict and its sister publications.