The Labour government, which came into power back in July 2024, has faced an unprecedented approval crisis.
Critics from across the political spectrum have voiced concerns to such a degree that Sir Keir Starmer has become one of the least popular prime ministers in history, according to YouGov approval ratings.
But faced with shots against policies from immigration to digital ID, the government has made clear its primary goal remains supporting businesses and achieving economic growth.
While the general public has voiced its discontent, new data suggests that on that front at least, the government may be doing better than expected.
The new tech-focused research campaign from audit, tax and consulting adviser RSM UK has taken a look at the sentiment among British tech businesses on their confidence in the current administration.
Tech industry backs Labour
Over three-quarters (76%) of tech business respondents agreed that they felt more confident that their business will grow under the current Labour government, while only 11% disagreed.
While Starmer’s critics may be surprised at these findings, for tech businesses, recent policy announcements related to the governments Modern Industrial Strategy have proven effective.
Among the most popular of these are tax incentives and legislation to boost overseas investment, the reformation of planning rules to allow rapid construction of new digital infrastructure, action to make energy costs easier for firms to deal with and plans to simplify technological regulation.
“Our survey of technology business leaders provides a data-backed yardstick of UK tech confidence. Behind all the noise, confidence within UK tech remains bullish,” said Ben Bilsland, partner and head of the technology industry at RSM UK.
“The government has been positive about technology and AI as an industry that can unlock economic growth. However, widespread adoption of AI and other technologies to improve efficiencies will only take the UK so far.”
Bilsland said the government can “stimulate innovation” through policies that directly address the “growing skills gap in our workforce” as well as provide support through “direct funding and tax policies to reward research and development activities and recruitment”.
International growth
Another popular policy among UK tech businesses was the government’s efforts to secure new international trade deals, which have been negotiated in the likes of India, France and the US.
International expansion is a common goal for tech businesses, and RSM UK’s findings have suggested among British businesses two regions stick out in particular, Europe and North America, seen as strategically important by 61% and 58% of firms respectively – interestingly when filtered for London-based businesses, North America was marginally the more popular choice.
It is not too surprising that these regions are seen as the most important for British tech businesses, both offering large markets with close ties to the UK, something Bilsland said will “likely remain for the foreseeable future”.
Despite recent volatile policy shifts seen in the US, notably ever-changing tariffs and immigration rules, it remains a key target in the UK.
As many as 86% of respondents felt either somewhat more enthusiastic or much more enthusiastic about doing business with the US over the past year.
Technological collaboration opportunities and market demand in the US were the most common factors affecting this, with diplomatic relations and trade regulations also mentioned.
Though there remains significant enthusiasm, RSM UK notes that political uncertainty in the States may still be negatively impacting businesses feelings towards other international opportunities.
“One shift we have noticed in 2025 has been deeper consideration by UK tech companies of overseas markets outside of the US,” Bilsland said.
“While the UK tech sector has not been as impacted by US tariffs as other industries, it has encouraged UK tech companies to reflect and consider other markets in more detail alongside the US.”
Foreign funding
Interest in the US and Europe is particularly well-founded when looking at sources of funding.
Among the respondents that secured funding over the past six months, 49% said it included funding from European VC and PE firms and 50% from US investors.
This is only slightly lower than the 67% which secured funds that include UK-based investors.
Overseas investment forms a strong part of the UK tech ecosystem and for Bilsland it is no wonder why.
“The UK boasts excellent innovation credentials alongside offering many incentives to run a business. Tech companies will continue to look in both the UK and globally to find the best investors and partners,” he said.
“As more overseas VC funds and PE houses increase their ownership of UK businesses, UK domestic VC and PE will continue to face rising competition to invest.”
Bilsland believes this activity will be a positive for UK tech, with consistent capital investment needed for growth.
“That said, all eyes will be on the Autumn Budget and in particular tax policies around investment, as changes here could have a significant impact.”
