How will new PM Truss shake up the UK tech market?

The new Prime Minister will continue business-as-usual in unusual times.

Former Foreign Secretary Liz Truss has succeeded Boris Johnson as leader of the Conservative Party, which could mean big changes for the tech world - athough early reports suggest nothing immediate.

Long billed as the continuity candidate, Truss is expected to continue many policies from the Johnson era, which primarily focused on turning the UK into a 'science and technology superpower'. The incoming PM has already signalled her intent to pursue this goal.

However, merely treading the same ground will not be enough to support an industry facing massive talent shortages, soaring costs and supply chain issues.

Truss will also need to make firm decisions on the UK's continued relationship with its largest export market, the European Union. She took a hardline (some might say ill-considered) stance on the Northern Irish border during the leadership campaign, one that risks further harming the UK-EU relationship if she pursues it in office, and businesses will be watching closely.

Firms are, however, likely to welcome even a little clarity in the near future. For months the UK has lacked support from the highest level, with Boris Johnson missing in action since his own MPs forced him to resign and the resulting leadership contest dragging on for the entire summer - paralysing the country when leadership was needed most of all.

So, what will a Liz Truss premiership mean for the technology market?

A new head of DCMS means changes for Online Safety Bill

Confirmed this morning, Nadine Dorries - an embarrassingly ardent supporter of Boris Johnson - is leaving her position as Secretary of State for Digital, Culture, Media and Sport, which she had held since September last year. Dorries was not respected in the tech industry - she infamously asked Microsoft when it was going to "get rid of algorithms" - but did provide the impetus to get the Online Safety Bill moving through legislature.

However, it was not long after that the Bill was delayed - again - with a final decision due this month. Whether that will actually happen now is anyone's guess.

Truss has signalled broad support for the Online Safety Bill in the past, but has suggested she will seek to change certain parameters: for example, weakening or removing the requirements for large services to regulate 'legal but harmful' content (like abuse and harassment) for adults. This would lower complexity but also weaken the legislation overall.

Penny Mordaunt, who has previously written about the need for a more agile government response to the digital economy, has been tipped as a possible replacement for Dorries, as has Kemi Badenoch.

Tech recruitment likely to remain stalled

One of the new PM's most important challenges in the technology sector will be to address the recruitment crisis, caused by a combination of Brexit and Covid, which has slashed the number of skilled workers entering the country.

Russ Shaw, founder of Tech London Advocates and Global Tech Advocates, said, "Solving this issue will require the new Prime Minister to make it easier for foreign workers to apply their skills in the UK through expanding schemes like the Scaleup Visa, while also investing in home grown digital education to improve the domestic talent pipeline."

Truss has made many concerning comments about immigration and refugees during the leadership contest, but has also said she supports skilled workers coming to the country. She is likely to continue with the various tech-friendly visa routes the Johnson administration launched.

Words run counter to actions on attracting foreign investment

Truss has stressed the importance of foreign investment, promising to implement new low-tax 'investment zones' and freeports with reduced planning restrictions.

She has also taken pot shots at "onerous EU bureacracy" that stymie investment (the EU, with its lower inflation, dramatically lower energy bills for consumers and increasingly clear intent to levy a windfall tax on oil and gas firms, is clearly no model to follow for a strong and stable UK government) - once again threatening the cross-Channel relationship - and questioned the importance of the UK-USA relationship.

The question, then, is who does she intend to attract to these freeports, if not the EU or USA? It certainly won't be China, which she intends to classify as an official threat to national security - and which the Government has repeatedly blocked from buying UK firms.

Data changes risk EU adequacy agreements

Truss has not yet shared her official position on the Data Protection and Digital Information Bill, which the Johnson administration was pushing through Parliament - although, as a Cabinet minister, we can assume she broadly supported it. The Bill replaces certain GDPR requirements, like the need to employ a data protection officer and use data protection impact assessments, with less stringent alternatives - for example, a 'senior responsible individual' instead of a dedicated DPO. It also deals with reforming the independent regulator, the Information Commissioner's Office, to give the Government more oversight of its decisions.

Removing requirements on businesses fits Truss's supply-side and Thatcher-driven approach to regulation and economics, so we expect the Bill to remain largely unchanged as it moves forward. However, risks remain about the divergence from EU rules and how that will affect data adequacy decisions (which enable the free flow of data between the UK and EU) going forward.

In line with her perception as the continuity candidate, Liz Truss seems unlikely to change much from Johnson's approach in the first few months of her premiership - although the big risk for British and Northen Irish firms is if her approach to Europe further degrades UK-EU relations.