Britain’s new business secretary, Peter Kyle, intends to facilitate the creation of the UK’s first £1tn company. Speaking to business leaders last week, he promised an “unrelenting” push to back wealth creation, positioning the UK government as an “active partner” in building corporate giants. “I want this to be the greatest place to start a business or scale up,” he declared.
This is the kind of muscular rhetoric that flatters both the City and Whitehall. Britain will not merely host unicorns; it will mint £1tn leviathans. Whether this bold vision can become a reality is another matter.
Depending on the day, the US boasts seven $1tn companies: Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla. Of course, $1tn (£733bn) is not £1tn ($1.36tn). Achieving Kyle’s target would mean building a more valuable company than Meta, Facebook’s parent, or Tesla. Such a company would dwarf Britain’s biggest businesses. For context, the market valuation of the entire FTSE 100 is around £2tn.
A distant dream
The UK has been here before. As chancellor in 2024, Jeremy Hunt pitched the idea to build a £1tn “British Microsoft”. But the country is missing some key ingredients that would enable such stratospheric valuations.
London was once home to a thriving stock exchange, but has fallen to 20th place in global ranking for IPO destinations. Britain’s most promising companies either become stagnate or move abroad. Listing reforms, meanwhile, have stumbled.
The UK has struggled to finish a railway, much less nurture a mega-corporation
Despite relaxing rules on dual-class shares and reducing shareholder approvals for certain transactions, the London Stock Exchange’s chief executive recently admitted that these changes have failed to spark a “real turning point”.
The UK lacks the deep capital markets that sustain the hyper-growth seen in the US. Unlike American banking, which was built to fuel private enterprise and help get risky ideas off the ground, British banks evolved to finance the state. The result is a system comfortable with government projects but wary of business risk.
Early-stage support in the UK is relatively strong, but it is leaky at scale-up stage. After companies raise seed funding or early venture capital, many fail to find follow-on funding and often seek bigger cheques and friendlier regulatory climates elsewhere.
Missed opportunities
Sadly, the UK’s most successful companies rarely stay British for long. Arm, the Cambridge-based chip-designer, showed promise before it collapsed, restructured, floated and was sold to foreign investors. Similarly, DeepMind – a sparkling jewel of British AI research – was snapped up by Google.
What’s more, despite having some of the top-ranked universities in the world, the UK struggles to retain its most promising talent. In January, AstraZeneca cancelled a £450m vaccine facility in Liverpool, claiming that Britain is no longer a competitive place to invest in drug manufacturing. It was a wake-up call: the country is losing not just investment but credibility too.
Increasingly, the UK appears unable to build much of anything. It has struggled to finish a railway, much less nurture a mega-corporation.
Where might Britain lead?
To be clear, Kyle’s ambition is welcome. The UK should aspire to grow promising companies, rebuild industrial heft and develop a sharper edge in global competition. But building a £1tn company would require fundamental changes.
First, the UK must celebrate and support experienced founders who are building and investing in high-risk, high-reward ideas. Potentially world-changing technologies are being developed and they are in urgent need of capital to grow.
Next, the government should prioritise the areas where the UK might be best fit to lead. Take fintech, for instance. The UK has produced globally recognised startups such as Revolut, Wise and Monzo – though retaining them remains a challenge. That said, if SumUp proceeds with its potential £11.5bn London listing, more firms may follow.
Kyle’s push for a £1tn company isn’t a plan, it’s a headline
Realistically, the UK may have missed the boat for AI leadership. Although UK natives such as Alan Turing and Geoffrey Hinton have helped to shape AI, the country is lagging behind the true leaders in the industry. For instance, the UK’s funding for AI is still measured in billions, not tens or hundreds of billions like in the US or China.
Why the obsession with a £1tn company anyway? Focusing instead on boosting new SMEs in tech, engineering and pharmaceuticals would likely provide more value to the economy. And doing so may foster a more competitive landscape – and would certainly make for less tax-avoidance scandals.
For now, Kyle’s push for a £1tn company isn’t a plan, it’s a headline. Remember, as the science and tech secretary, Kyle reportedly asked ChatGPT for advice on why AI adoption is so slow among British businesses, as well as what podcasts he should appear on. Such thinking does not inspire great confidence that Whitehall can play Silicon Valley venture capitalist.
Whether the government can mobilise capital, reform regulation and retain top talent remains to be seen. But until those foundations are fixed, talk of a £1tn titan is little more than a political mirage – attractive on the horizon but destined to shimmer and vanish when approached.
Britain’s new business secretary, Peter Kyle, intends to facilitate the creation of the UK’s first £1tn company. Speaking to business leaders last week, he promised an “unrelenting” push to back wealth creation, positioning the UK government as an “active partner” in building corporate giants. “I want this to be the greatest place to start a business or scale up,” he declared.
This is the kind of muscular rhetoric that flatters both the City and Whitehall. Britain will not merely host unicorns; it will mint £1tn leviathans. Whether this bold vision can become a reality is another matter.
Depending on the day, the US boasts seven $1tn companies: Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla. Of course, $1tn (£733bn) is not £1tn ($1.36tn). Achieving Kyle's target would mean building a more valuable company than Meta, Facebook's parent, or Tesla. Such a company would dwarf Britain’s biggest businesses. For context, the market valuation of the entire FTSE 100 is around £2tn.
