- JPP Law, a commercial law firm specialising in startups and investment, has reviewed Labour’s first year in government.
- Labour has expanded state-backed investment channels and revived long-term industrial planning to support high-growth sectors.
- Key tax incentives for early-stage businesses, such as SEIS, EIS and R&D relief, have been kept in place, boosting stability for investors and founders.
TRING, UK. January 13th, 2026 – JPP Law, a commercial law firm advising startups, scale-ups and investors across the UK, says the first year of the Labour Government has created a clearer, more predictable landscape for early-stage businesses.
Since taking office in July 2024, Labour has repeatedly stressed its intention to “reset” the UK’s growth model. After the release of the Budget last November, many businesses are still asking a simple question: what has actually changed?
JPP Law’s review shows that the Government has adopted a pragmatic, quietly interventionist approach, one that expands existing structures rather than reinventing the system.
A renewed focus on long-term planning
One of the most notable developments has been the launch of Invest 2035: The UK’s Modern Industrial Strategy, first published for consultation in late 2024. This marks the return of a formal industrial strategy after several years of frequent policy changes that included growth plans, missions, and various short-term frameworks.
Invest 2035 identifies priority sectors for long-term support, including digital technology, life sciences, clean energy, the creative industries and advanced manufacturing. Government sector plans released in 2025 outline ambitions and investment priorities for these industries up to 2035, signalling a clearer direction for multi-year planning.
“Startups benefit from stability,” said Mark Glenister, a commercial law solicitor and Founder of startup specialist law firm JPP Law. “A published industrial strategy gives founders more confidence that the policy environment will not shift dramatically from year to year.”
While the strategy does not yet set out fixed long-term R&D budgets for individual programmes, it does commit to a decade-long framework for industrial development with multi-year sector planning.
State-backed investment ramps up
The Government has made the expansion of public investment channels a central part of its growth agenda. The British Business Bank (BBB) now has substantially greater firepower, following an increase in its investment capacity. This allows the BBB to broaden its regional programmes and scale-up support, potentially narrowing the long-standing funding gap between London and the rest of the UK.
Alongside the BBB, the newly established National Wealth Fund brings together several public finance functions to co-invest in high-growth industries. While its early focus is on sectors such as clean energy, industrial manufacturing and green technology, JPP Law says its long-term impact could be significant for deep-tech startups.
The UK has long faced challenges in scaling deep-tech and infrastructure-heavy startups. Consolidating public investment into clearer channels may help address some of those historic barriers.
The Government has also signalled continued interest in unlocking long-term domestic capital, including pension-fund investment, for UK high-growth companies. These reforms remain in development, but the direction of travel suggests a stronger focus on mobilising institutional investment for innovation.
A more coordinated national approach to AI
One of the clearest areas of political emphasis has been artificial intelligence. The AI Opportunities Action Plan, announced earlier this year, outlines a more coordinated strategy than the UK has seen previously. It includes the creation of “AI Growth Zones,” which provide faster planning processes for data centres, predictable energy capacity and opportunities to test emerging technologies in controlled environments.
Public computer capacity is also being expanded on a large scale, aiming to address a major bottleneck faced by AI startups – the high cost and limited availability of computational resources. A new National Data Library, designed to make certain public datasets safely accessible for training and research, fits into this broader push.
“It appears the Government is trying to fix the foundational issues that actually constrain AI growth,” said Mark. “This is a welcome shift away from hype and towards infrastructure.”
Regulatory reform: small steps that matter
Startups frequently cite regulatory uncertainty as a major barrier to innovation, and Labour has indicated that it intends to address this through a more coordinated approach.
A proposed Regulatory Innovation Office is intended to oversee modernisation efforts across government departments, support innovation-friendly regulation, and help streamline approval processes. While much of this work is still at an early stage, the Government has signalled that it wants to expand the use of regulatory sandboxes, which were originally developed in fintech, into more sectors of the economy.
Planning rules affecting the development of laboratories, specialist R&D facilities and data-heavy infrastructure have also been reviewed, with the Government indicating that innovation clusters will be prioritised for faster planning pathways.
While none of these changes are dramatic in isolation, JPP Law says their cumulative effect could be significant. “Startups need regulation that understands how innovation works,” the firm notes. “The measures introduced so far suggest the Government is listening to that message.”
A deliberate choice to preserve tax incentives
Perhaps the most reassuring development for founders and investors has been the Government’s decision to leave core tax incentives unchanged. R&D tax relief, SEIS, EIS, the Patent Box and full expensing, which are all crucial tools for early-stage innovation, remain intact. ARIA, the UK’s high-risk research funding agency, has also kept its long-term funding.
JPP Law’s overall assessment
In its first year, the Government has prioritised clarity, continuity and long-term strategy. While the most immediate benefits are likely to be felt in AI, life sciences, clean energy and advanced manufacturing, the overall environment for startups appears more stable than it has been in recent years.
“The Government is building on what already exists, rather than disrupting it,” Mark Glenister added. “The next phase will depend on delivery, particularly around investment programmes and regulatory reform, but the direction of travel is constructive.”
ENDS