Business

Santander has doubled the financial firepower it commits to the University of Sunderland each year, signing a renewed partnership agreement that will channel £100,000 annually into scholarships, bursaries and start-up grants until the 2026-2027 academic year.

The deal, agreed between the Spanish-owned high street lender and one of the North East’s largest universities, builds on a near eight-year relationship that has already supported hundreds of Sunderland students. For Santander, it represents a further bet on the regional higher education sector at a time when many universities are tightening belts in response to mounting financial pressure.

Under the new arrangement, Sunderland will distribute ten £1,000 Brighter Futures Awards to ease day-to-day financial pressure on undergraduates, alongside six £5,000 Education Awards to cover tuition fees, course materials and accommodation. A further 120 £250 Employability Awards will help students meet the unexpected costs that come with launching a career, from interview travel to placement essentials. Six £5,000 Entrepreneurship Awards complete the package, open to students, staff and graduates seeking to grow fledgling businesses.

All Sunderland students, graduates and staff will also gain access to Santander Open Academy, the bank’s free global e-learning platform offering online courses, grants and expert-led content designed to align learners with skills currently in demand across the labour market.

Sir David Bell, the University’s Vice-Chancellor and Chief Executive, sealed the agreement alongside Santander UK’s National Partnerships Director, Jonathan Powell.

“Our partnership with Santander Universities has been running for nearly eight years and has brought immense benefit to students and staff alike,” Sir David said. “These new awards will provide the next generation of Sunderland’s most talented people with the opportunity to achieve even greater success in the future. I am enormously grateful to Santander Universities for the continuing trust and faith they have in our university.”

For Santander, the Sunderland tie-up is part of a far larger global education programme that has assisted nearly 8.3 million people and businesses over the past three decades. The bank has invested more than €2.5 billion through collaboration agreements with over 1,000 universities and institutions across 13 countries, with £115 million committed to UK university partnerships alone since 2007.

Mr Powell said the renewed deal reflected an unusually productive working relationship. “At Santander we believe strongly in the power of collaboration, and that has been strongly evident in our partnership with Sunderland. This new agreement provides more opportunities for people to prosper through our support of education, employability and entrepreneurship.”

The commercial logic for the bank is as much about brand visibility on UK campuses as it is corporate philanthropy. With graduate banking competition fierce and customer acquisition costs rising, sustained presence at universities offers Santander a route to a generation of future current account holders, mortgage borrowers and small business banking customers.

The impact on individual recipients is already visible. Among the dozen students recently presented with £60,000 of Santander Education and Entrepreneurship awards was Kirsty Knott, a 2010 Business and Financial Management graduate from Ryton, who has used a £5,000 Entrepreneurship Award to develop Expansions Coaching, a podcast and emerging events business she runs alongside her husband Anth. The venture is preparing to launch face-to-face networking through the Crack on Club, a small business meet-up at the Twenty Twenty Bar in Newcastle from 14 May.

Kieran Harley, 25, a first-year Electronic and Electrical Engineering student from Sunderland, was awarded one of six £5,000 Santander Education Awards. As a carer for his mother who also works part-time, he said the funding would directly translate into reduced working hours and more time to focus on his degree.

“My long-term goal is to work in the renewable energy sector, and winning the award will make a significant difference to my studies,” he said. “The Santander Education Award will allow me to reduce my working hours, giving me more time and flexibility to focus both on my degree, and to better support my mum.”

For Sunderland, which has built a reputation for widening participation among students from non-traditional backgrounds, the doubling of Santander’s commitment is a welcome counterweight to a sector grappling with frozen tuition fee income, falling international student numbers and rising operating costs. With more than half of UK universities now reporting deficits, corporate partnerships of this scale are becoming increasingly central to balancing the books — and to keeping the door open for students who would otherwise struggle to fund their studies.

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Santander doubles University of Sunderland support to £100,000 a year in renewed partnership

A British artificial intelligence company founded by one of the architects of fintech unicorn Tide has written to every Member of Parliament warning that the political debate over children’s smartphone use has descended into a “false choice” between blanket bans and unrestricted access.

SafetyMode, the London-headquartered child safety technology firm led by Tide founder George Bevis, has used the parliamentary intervention to press ministers to consider a third path, arguing that on-device technology can give parents meaningful control without locking children out of the digital economy altogether.

The timing is not accidental. The letter lands in Westminster postbags days after a landmark American court ruling found that several of Silicon Valley’s largest platforms had knowingly engineered addictive products for young users, a judgment that has sharpened the appetite among legislators on both sides of the Atlantic for tougher action.

In Britain, the political mood music has shifted markedly over the past eighteen months, with cross-party support building for tighter restrictions on under-16s. Yet SafetyMode’s pitch to MPs is that the conversation has narrowed prematurely.

“Right now, the entirety of the conversation around social media and phone safety seems to pretend all we can achieve is either to open the floodgates entirely or to ban them completely, losing all benefits these technologies may offer,” the company writes in its letter, copies of which have been seen by Business Matters.

The firm, founded by Mr Bevis alongside Bertie Aspinall and product specialist Dan Barker, has spent the past two years developing what it claims is one of the most sophisticated parental control platforms on the market. Unlike rival products that route children’s data through cloud servers, SafetyMode’s technology runs artificial intelligence directly on the device, filtering harmful content in real time while keeping personal information off external servers.

The product was built in partnership with parenting forum Mumsnet, whose research underpins much of the company’s commercial thesis. More than 90 per cent of parents surveyed told Mumsnet that current smartphones are not safe enough for children, while 86 per cent expressed concern about the impact of devices on their child’s mental health and attention span.

Speaking to Business Matters, Mr Bevis said the political class risks reaching for the bluntest available instrument. “We are at a turning point in how society views children and smartphones. There is clear agreement that there is a problem, but the solutions being discussed are too narrow. Regulation matters, but it takes time, and it cannot be the only answer.”

Mr Aspinall, the firm’s co-founder, struck a more pointed note. “The courts, governments, schools and parents all recognise the risks. But companies at the heart of this won’t fix it themselves. So the question becomes, what do we do next? On the one hand is regulation. But if we want to protect children now, the answer is simple. You build safety into the device itself and put control back in the hands of parents.”

The company’s technology has been designed to read context rather than merely scan for prohibited keywords, identifying when conversations turn abusive, sexualised or otherwise damaging, even when those exchanges would slip past conventional filters.

For now, SafetyMode is available only on Android handsets. The firm has been openly critical of Apple, arguing that the Cupertino giant’s restrictions on third-party developers prevent meaningful parental controls being built for iPhone users, a complaint that echoes broader regulatory scrutiny of Apple’s walled garden in both Brussels and Washington.

There is also an industrial strategy dimension to the company’s lobbying. SafetyMode is positioning Britain as a potential global hub for what it calls the “safe tech for kids” movement, arguing that ministers could combine child protection with a fresh wave of innovation, investment and skilled job creation if they chose to back domestic firms developing protective technologies.

Whether MPs will be receptive remains to be seen. Backbench pressure for outright restrictions on under-16s using social media has hardened in recent months, and Whitehall has shown limited appetite for technological solutions that depend on parental engagement. But with the American courts now exposing platform behaviour in unprecedented detail, the case for action of some kind appears unstoppable.

The question Mr Bevis and his colleagues are putting to Parliament is whether that action should empower parents or simply slam the door shut.

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SafetyMode warns MPs of ‘false choice’ on child smartphone safety as global pressure mounts

The British Business Bank has committed $20m to Ineffable Intelligence, the London-headquartered artificial intelligence venture, as part of a landmark $1.1bn seed round that ranks as the largest in European history.

In a move that signals a sharpening of the Government’s industrial strategy around frontier technology, the state-owned development bank has co-invested alongside the Sovereign AI Fund, the Treasury-backed vehicle established to keep strategically significant AI businesses anchored on these shores. The Sovereign AI Fund has put in further capital on top of the Bank’s contribution, although the precise figure has not been disclosed.

The British cheques sit within a syndicate that reads like a who’s who of Silicon Valley capital. Sequoia, Lightspeed, NVIDIA, Index Ventures, Google, EQT, Evantic, Flying Fish, DST Global and BOND have all joined the round, lending weight to the argument that Britain remains capable of attracting deep-pocketed foreign investors to its homegrown technology champions despite persistent concerns about the country’s appetite for risk.

Ineffable Intelligence is the brainchild of David Silver, the University College London professor widely regarded as one of the most influential reinforcement learning researchers of his generation. Silver previously ran the reinforcement learning team at Google DeepMind and is credited with pivotal work on AlphaGo, AlphaZero, AlphaFold and AlphaProof, the systems that successively rewrote what machines were thought capable of in domains ranging from board games to protein folding and mathematical reasoning.

His new venture has set itself a deliberately audacious mission: to build what Silver calls a “superlearner”, a system capable of discovering knowledge from its own experience rather than relying on the data humans feed it. If realised, the technology would represent a step change beyond today’s large language models, which remain heavily dependent on training material drawn from the internet.

For the British Business Bank, the investment marks the latest in a steady cadence of AI commitments. The lender has now made nine AI deals over the past twelve months, with recent backing for autonomous driving outfit Wayve and conversational AI specialist PolyAI. The Bank has also been a quietly significant force behind the commercialisation of British academic research, supporting almost a quarter of all university spinout deals struck between 2022 and 2024.

Charlotte Lawrence, managing director of direct equity at the British Business Bank, described Silver as “a generational talent who has consistently been on the cutting edge of AI development“. She added: “Ineffable Intelligence has the potential to produce a paradigm shift in our scientific and technology landscape, and we are incredibly excited to be supporting him and his team in this endeavour.”

George Mills, the Bank’s investment director, said the company was tackling “one of the most significant opportunities within AI”, citing potential applications spanning advanced problem solving and new product development. “The UK produces world-class AI talent, and we are pleased to back strategically important businesses to scale and stay in the UK,” he said, in remarks that will be read as a pointed reminder of the Government’s determination to stem the flow of British intellectual property to American owners.

Josephine Kant, head of ventures at Sovereign AI, was equally bullish. “Very few founders in the world could credibly set out to build a superlearner, a system that discovers new knowledge from its own experience rather than ours. David is one of them,” she said. “From AlphaGo to AlphaZero to AlphaProof, he has spent nearly two decades turning reinforcement learning from a research idea into the results the rest of the field builds on. Ineffable is being built in the UK, and that matters.”

The deal arrives at a delicate moment for British technology policy. Ministers have repeatedly stressed their ambition to position the country as a global hub for safe, sovereign AI development, but they have faced criticism for the relative scarcity of late-stage growth capital available to scaling deep-tech businesses. A seed round of this magnitude, anchored by domestic public capital and topped up by the world’s most prolific venture investors, will be cited by Whitehall as evidence that the strategy is beginning to bear fruit.

For SME founders watching from the sidelines, the headline figures may feel a world away from their own funding realities. Yet the structural shift is significant: the British Business Bank’s growing willingness to write meaningful equity cheques into frontier technology businesses, in concert with private capital, suggests a more interventionist posture that could in time filter down to a broader cohort of high-growth British companies.

Read more:
British Business Bank backs record-breaking Ineffable Intelligence raise as UK doubles down on superintelligence ambitions

Grosvenor, the property company controlled by the Duke of Westminster, has broken ground on a £40m repositioning of The Hive in Manchester’s Northern Quarter, in a move that takes the group’s directly managed flexible workspace model outside London for the first time.

The Lever Street landmark, which extends to 78,000 sq ft, will be reimagined as a destination office building anchored by 25,500 sq ft of flex space and a hospitality-led amenity offer. Ground-floor units fronting Lever Street will house a deli and a restaurant, both run by what Grosvenor describes as “well-known Manchester names”, with a launch pencilled in for autumn 2026.

For Grosvenor’s UK property arm, the project is the most visible test yet of a regional strategy launched in 2020 that now stretches across roughly 500,000 sq ft in Manchester, Birmingham, Bristol and Leeds. The portfolio is currently 90 per cent let, a figure that compares favourably with a regional office market still wrestling with hybrid working and a flight to quality.

The group has appointed x+why, the B Corp-certified workspace operator, to run more than 22,000 sq ft of the flex floors under a management agreement. The deal extends a partnership that began in 2023 at Fivefields, Grosvenor’s social-impact workspace in Victoria, and signals a growing appetite among traditional landlords to plug operating expertise into their own buildings rather than cede space to third-party flex providers on conventional leases.

Interiors will be designed by x+why’s in-house team, whydesign, with a deliberate nod to local craftsmanship. Pieces by Manchester-based furniture designers and artists including Aiden Donovan, Jesse Cracknell, Matt Dennis and Mima Adams will be woven into the scheme, while elements from the fit-out installed by previous tenant The Arts Council are to be repurposed, a small but pointed gesture towards the building’s creative heritage.

The bet on Manchester reflects a wider conviction inside Grosvenor that the city’s office market remains one of the most resilient outside the capital, underpinned by a deep talent pool, inward business migration and a structural shortage of grade-A space. The landlord’s nearby Ship Canal House is, it says, close to full occupancy following a run of new lettings and renewals.

Fergus Evans, office portfolio director at Grosvenor Property UK, said the Hive scheme typified the group’s regional playbook of taking “a prime asset in a great location and repositioning it to meet the evolving needs of today’s occupiers”. He added: “Manchester continues to perform strongly for us, and our investment in The Hive reflects sustained demand for well-located, high-quality offices, particularly from the city’s growing digital and creative economy. Combining x+why’s experience in creating design-led, community-focused workspaces with our approach to active asset management, we are well placed to deliver a distinctive, flexible offer that responds to local demand.”

Rupert Dean, chief executive and co-founder of x+why, said the operator was “delighted to be partnering with Grosvenor again to bring The Hive into its next chapter”. He added: “The Northern Quarter is one of the most exciting and entrepreneurial parts of the UK, and The Hive will reflect that energy, offering a workspace that is not only functional, but inspiring and socially driven.”

For SMEs and scale-ups in Manchester’s digital and creative cluster, the very occupiers Grosvenor and x+why are courting, the arrival of a higher-end, hospitality-led flex product on Lever Street is likely to sharpen competition with established players such as WeWork, Bruntwood and Department, and could nudge headline rents in the Northern Quarter higher when the doors open next autumn.

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Grosvenor takes flex workspace model out of London with £40m bet on Manchester’s Northern Quarter

The 50-strong flooring chain backed by Sir Richard Harpin’s Growth Partner has appointed restructuring advisers, raising the prospect of store closures and redundancies as the cost-of-living squeeze continues to drag on consumer spending.

Flooring Superstore, which employs around 300 people from its Bishop Auckland headquarters in County Durham, has drafted in Begbies Traynor and the restructuring arm of Santander to weigh its options. People familiar with the matter said a company voluntary arrangement (CVA) or a full administration are both on the table, controversial routes that typically squeeze landlords and suppliers while preserving the equity of incumbent owners and senior creditors.

The retailer was co-founded in 2012 by Dan Foskett and sells vinyl, laminate and wood flooring alongside artificial grass through its branded showrooms and online channels. Growth Partner, the investment vehicle established by Harpin, the entrepreneur behind home emergency repair group HomeServe, backed the business in 2020 with a £5 million injection that allowed Foskett to crystallise a portion of his shareholding. He retains a 22 per cent stake, while Growth Partner holds 25 per cent. The remainder is split between three individual investors.

Harpin, who last year published “How to Make a Billion in Nine Steps”, focuses on British and European retail names primed for scale. His portfolio includes pizza oven specialist Gozney and bathroom retailer Easy Bathrooms. However, several Growth Partner-backed businesses have collapsed in recent years, among them Crafters’ Companion, co-founded by Dragons’ Den investor Sara Davies, and Yorkshire-based Keelham Farm Shop.

Flooring Superstore was a pandemic winner, riding the wave of home-improvement spending while consumers were confined to their properties. That tailwind reversed sharply once lockdowns eased, as the chain was forced to absorb spiralling energy and raw material costs and unwind the additional capacity it had built. The cost-of-living crisis has since hammered demand for big-ticket household refurbishments.

Connection Retail, the parent company that also owns Direct Wood Flooring, Grass Direct and Snug Carpets, posted turnover of £49.3 million in the year to the end of July 2024, down from £51.8 million a year earlier. Pre-tax profit nonetheless swung from a £3.3 million loss to a £619,000 profit, while net debt stood at £3.5 million at the year-end.

Santander shored up the group’s balance sheet last June with a debenture, a secured loan agreement under which the lender acts as security trustee. Filings at Companies House show Connection Retail has two outstanding charges, having pledged its property and overall business assets as collateral to both Growth Partner and the high-street bank.

The disclosed restructuring talks mark a striking pivot from the expansion blueprint Foskett set out only twelve months ago, when he told The Times that he intended to grow the estate to as many as 150 stores, deepen the brand’s marketing reach and continue building its exclusive product range.

Growth Partner and Flooring Superstore had not responded to requests for comment at the time of publication. Santander and Begbies Traynor declined to comment.

Read more:
Harpin-backed Flooring Superstore weighs restructure as sales slip

A British deep-tech start-up promising to liberate AI-powered businesses from spiralling cloud bills has secured £1 million in pre-seed funding, in a deal that points to one of the most pressing margin headaches facing the SaaS sector.

Loc.ai, a London-based outfit building so-called “off-cloud” AI infrastructure, has closed the round under the leadership of Fuel Ventures, the prolific early-stage investor founded by Mark Pearson. The capital will be used to accelerate go-to-market efforts among SaaS and desktop software companies that are presently bleeding margin to the per-call billing model imposed by hyperscale cloud providers.

The pitch is straightforward, if technically ambitious. Rather than routing every user request through a remote data centre, and paying a fee to the likes of Amazon, Microsoft or Google for each one, Loc.ai shifts the artificial intelligence workload directly onto the customer’s own kit, be that a laptop, a workstation or dedicated edge hardware. The result, the company argues, is faster performance, far stronger data privacy and, crucially for chief financial officers, predictable fixed costs in place of variable cloud fees that scale unhelpfully with user growth.

Co-founder Joseph Ward did not mince words. “For years, we’ve handed control of our most critical AI infrastructure to companies we don’t own and can’t influence,” he said. “Inference costs keep climbing. Services get switched off without warning. Loc.ai exists so that developers, governments and businesses never have to accept those terms again.”

That message is landing at a moment when the economics of generative AI are coming under serious scrutiny. With AI no longer a bolt-on feature but increasingly the product itself, embedded in meeting tools, writing assistants, customer-support platforms and code copilots, every keystroke can trigger a billable event. For fast-growing software firms, the result is a cost curve that climbs in lock-step with usage, eroding the margin economics that have long underpinned the SaaS model.

Loc.ai is also tapping into Britain’s intensifying push for sovereign AI. Sensitive material, from boardroom transcripts to customer conversations, is at present routinely shipped through third-party cloud APIs sitting outside national jurisdiction. By keeping inference on-device, Loc.ai claims to remove that exposure entirely, leaving customers with full control over where their AI runs and where their data resides.

The technology is being made viable by the rapid maturation of consumer hardware. Modern laptops can now comfortably run open-source models in the seven to thirteen billion parameter range, sufficient, the company says, to power the bulk of enterprise and SaaS use cases without ever phoning home.

Loc.ai was selected for the inaugural cohort of the Google for Startups Accelerator 2025, a programme that has given the team early sight of the ultra-efficient models being designed by Google for consumer devices. That access has shaped the company’s road map and, the founders argue, positioned it for the architectures that will define the next decade rather than those dominating today’s headlines.

Ward and his co-founder Saif Al-Ibadi are not first-time operators. The pair previously built a deep-tech business applying generative design to defence and aerospace engineering, and counted the Ministry of Defence among their clients, delivering the UK’s first generatively designed rocket engine and reportedly slashing design times by more than ninety per cent. Their pedigree in resource-constrained AI has already been put to commercial use through a multi-year contract with B2Space, which has deployed Loc.ai’s agents at the edge of space and cut bandwidth costs by a similar margin.

Mark Pearson of Fuel Ventures said the firm was backing a problem that has fast become impossible to ignore. “Loc.ai is tackling a critical, margin-eroding challenge facing SaaS as AI usage scales,” he said. “Their deep-tech expertise and track record in deploying AI in constrained environments position them strongly to deliver sovereign AI at scale. We’re excited to support Joe and Saif as they help companies regain control over their technology and costs.”

For the CTOs, engineering chiefs and founders Loc.ai is courting, the proposition is simple: convert an unpredictable variable cost into a fixed one, regain control of sensitive data, and stop subsidising the hyperscalers’ growth with their own margin. With the pre-seed round now closed, the company is betting that an increasing share of the British software industry is ready to listen.

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British deep-tech start-up loc.ai raises £1m to break SMEs free from the cloud’s ‘inference tax’

A British-backed robotics start-up promising to replace ageing offshore vessels and crews with always-on underwater machines has emerged from stealth with $5m (£3.95m) in pre-seed funding, signalling fresh investor appetite for so-called “physical AI” plays targeting the world’s most stubbornly analogue industries.

Bubble Robotics, founded in 2025 by former engineers from NASA and ETH Zürich, has secured the round from Episode 1 Ventures, Asterion Ventures and Norrsken Evolve, following its incubation through London-based talent investor Entrepreneur First. The company is already sitting on more than $4m of signed letters of intent across offshore wind, subsea infrastructure and maritime security, suggesting commercial pull is running well ahead of the typical pre-seed playbook.

The pitch is straightforward, if ambitious. Today, inspecting an offshore wind turbine, a buried data cable or a section of seabed pipework typically demands a chartered vessel, a specialist crew and a daily bill that can climb to $100,000. According to Bubble’s founders, between 80 and 90 per cent of those costs are tied up in the boat and the people on it, rather than in the inspection itself.

“By removing that dependency, we unlock a step change in cost, safety and operational frequency,” said Jean Crosetti, chief executive and co-founder. “What used to be episodic becomes continuous.”

The plan is to dispense with vessel-based missions altogether and instead deploy fleets of resident autonomous robots that live at sea for months at a time, continuously inspecting, monitoring and gathering data without human intervention. Crosetti likens the model to the satellite constellations that have transformed earth observation over the past decade, only pointed downward into the water column rather than up at the atmosphere.

The timing reflects a wider inflection point. Cheaper edge computing, more capable on-device AI and the rapid expansion of low-earth-orbit satellite connectivity have, between them, made persistent unmanned operations technically feasible in a way they were not even three years ago. The macro pull is equally significant: the offshore energy sector alone is forecast to need an additional 600,000 workers by 2030, a shortfall that no graduate scheme is going to plug in time.

Bubble is selling its capability on a robotics-as-a-service basis, sparing customers the upfront capital expenditure and offshore mobilisation costs that have traditionally locked smaller operators out of high-frequency inspection regimes. Target use cases span the inspection of wind turbine foundations, cables, pipes and subsea structures; benthic mapping, photogrammetry and biofouling monitoring for climate and biodiversity clients; and mine countermeasures, unexploded ordnance detection and continuous surveillance for defence and maritime security buyers.

That last category is increasingly pertinent. Recent incidents involving subsea data cables in the Baltic and North Sea have pushed the security of underwater infrastructure up the agenda for European governments and Nato, exposing how thinly monitored much of it remains. Persistent autonomous systems offer a way to maintain a continuous presence around sensitive assets without committing scarce naval resources.

Alice Bentinck, co-founder of Entrepreneur First, said the founders had stood out from the moment they met at one of the firm’s kick-off weekends. “Patricia and Jean formed a team around a shared belief and complementary skill-set: Patricia with world-class technical credibility in robotics, Jean with unusual commercial instinct and intensity. Their pace of iteration throughout the programme and strong customer obsession make Bubble Robotics a company to watch closely.”

For the wider SME ecosystem, Bubble’s emergence is a useful data point. It suggests that capital is still flowing into deep-tech start-ups with credible commercial traction, even as more speculative AI plays cool, and that the long-promised convergence of robotics, AI and connectivity is finally producing businesses with revenue lines attached, not just demos.

Read more:
Bubble Robotics surfaces from stealth with $5m to build the ocean’s autonomous workforce

Ministers are turning up the heat on Britain’s biggest companies to fortify their cyber-defences, warning that a new generation of artificial intelligence tools, including Anthropic’s controversial Mythos model, risks unleashing a fresh wave of sophisticated hacking against UK plc.

In a pointed intervention, Baroness Lloyd of Effra (pictured), the cybersecurity minister, has written to almost 200 business leaders pressing them to back a new “cyber-resilience pledge” designed to drag boardrooms into the front line of digital defence.

To sign up, companies must make cybersecurity an explicit board-level responsibility, enrol with the National Cyber Security Centre’s early-warning service, and require the “Cyber Essentials” certification throughout their supply chains. The pledge will be formally launched in the summer and is intended to give investors, customers and trading partners a clearer benchmark by which to judge a business’s digital defences.

The push comes against a febrile backdrop. Anthropic, the San Francisco-based AI developer, revealed last week that it had decided not to release Mythos, a model honed for cybersecurity work, because of its uncanny ability to sniff out vulnerabilities in software. Instead, the company has quietly handed it to 40 US technology firms to help them shore up their defences.

While some industry watchers have dismissed the move as a marketing flourish, Wall Street, the City and financial regulators are taking it seriously. Britain’s biggest high-street lenders, including Barclays, Lloyds and NatWest, are understood to be in talks with Anthropic about gaining access to the model.

Andrew Bailey, governor of the Bank of England, has gone so far as to suggest that Anthropic may have “found a way to crack the whole cyber-risk world open”, an unusually colourful assessment from Threadneedle Street.

The UK’s AI Security Institute, one of the few bodies outside the United States to have put Mythos through its paces, described the model as a “step up” in capability. It concluded that Mythos was “at least capable of autonomously attacking small, weakly defended and vulnerable enterprise systems where access to a network has been gained”, though it stopped short of saying whether the model could breach better-fortified targets.

For SMEs, the assessment is uncomfortable reading. The lion’s share of “small, weakly defended” enterprise systems sits squarely in the small and medium-sized business community, where IT budgets are tight and dedicated security teams a rarity.

Dan Jarvis, the security minister, will press the pledge at this week’s CyberUK conference in Glasgow, where he is expected to argue that the country still suffers from a yawning perception gap between digital and physical crime. Drawing on the recent ransomware attack that crippled Jaguar Land Rover, Jarvis will tell delegates that had the same damage been done by “an old-school physical attack, it would have been the equivalent of hundreds of masked criminals turning up to dealerships across the country, breaking glass, smashing up computers and driving cars right off the forecourt”.

His message: “There is no real difference between them; they are both brazen acts of criminality.”

Lloyd struck a similarly urgent tone, telling business leaders: “The cyber threat facing UK businesses is serious, growing and evolving fast. AI is giving attackers capabilities that would have seemed extraordinary just a year ago and no organisation can afford to be complacent. Cyber-resilience isn’t just a technical issue; it’s a board responsibility and we’re asking every boardroom in Britain to prove they treat it as one.”

Despite years of warnings from Whitehall and the NCSC, the take-up of basic cyber hygiene measures remains stubbornly low. Just 56,000 Cyber Essentials certificates were issued in 2025, covering roughly 1 per cent of UK businesses, a figure that ought to give every chair, chief executive and finance director pause for thought.

Help, of a sort, is on the way. The Cyber Security and Resilience Bill, currently working its way through Parliament, will compel firms operating in critical sectors to raise their game. But ministers appear unwilling to wait for the legislation to land before applying pressure on the boardrooms they believe should already be ahead of the curve.

For SME owners and directors, the practical takeaway is unambiguous. AI-powered attack tools are no longer a theoretical worry kept at bay by the world’s best-resourced criminals. They are, increasingly, a clear and present danger, and a signature on a government pledge will count for little if the basics are not in place behind the boardroom door.

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Ministers urge British boardrooms to sign cyber-resilience pledge as AI threat escalates

The taxman has been forced into a tactical retreat over a contentious VAT levy on free medicines supplied to seriously ill patients, after Britain’s pharmaceutical heavyweights warned the policy was jeopardising the country’s standing as a global life sciences hub.

HM Revenue & Customs has confirmed to the industry that it will pause enforcement of disputed VAT bills issued against drugs companies providing medicines free of charge under early access programmes, while Whitehall thrashes out a longer-term settlement with the sector.

The climbdown follows mounting alarm in boardrooms after Bayer, the German pharmaceutical multinational, took the unprecedented step last month of halting new patient enrolments under its UK compassionate use scheme. *Business Matters* understands that at least one further major drugmaker is now actively weighing a similar withdrawal, raising the spectre of vulnerable patients being denied cutting-edge therapies.

At the heart of the dispute are post-clinical trial continuity of care and compassionate use schemes, arrangements designed to bridge the gap for patients with life-threatening or severely debilitating conditions who require access to medicines that have yet to secure marketing authorisation or NHS funding. For many of these patients, the schemes represent a clinical lifeline.

HMRC had begun issuing VAT demands to pharma companies on the basis that supplying these medicines, even gratis, constituted a taxable transaction. Industry leaders have argued the interpretation is not only commercially punishing but threatens to undermine the UK’s hard-won reputation as a destination of choice for clinical research, a sector ministers have repeatedly identified as central to the government’s growth ambitions.

The Association of the British Pharmaceutical Industry has been pressing ministers to confirm that “clinically justified” free-of-charge supply should fall outside the scope of VAT altogether. Without that assurance, executives warn, multinational sponsors will simply route their next generation of trials to more accommodating jurisdictions.

Following a recent meeting between Treasury officials and pharma chief executives, HMRC policy officials have informed the industry that, while the agency retains an obligation to protect Exchequer revenue, it accepts the government is “actively considering” the issue. The taxman has therefore agreed to exercise its discretion by extending review periods and holding off on enforcement action while talks continue. Crucially, however, HMRC has not budged on its view of historic tax liabilities, meaning bills already issued remain on the table.

A Whitehall source insisted that no blanket reprieve was on offer, with each case being assessed individually. “HMRC is not systemically extending review periods,” the source said.

The political temperature has been rising for months. Julia Lopez, the shadow science, innovation and technology secretary, wrote to Liz Kendall, her opposite number, in February warning that “the UK’s reputation as a home for clinical research is essential to our status as a life sciences superpower. That reputation is now at risk.”

In a reply this month, Lord Vallance, the science minister and a former senior executive at GSK, acknowledged ministers were “aware of the issue” and recognised “the importance of patients across the UK having access to innovative medicines.” He confirmed the government was in “discussions with the sector on this matter” and added: “I fully recognise the concerns you have raised.”

Bayer, in announcing its decision to suspend new enrolments, said it had been supplying treatments to patients with “life-threatening, long-lasting, or severely debilitating conditions or diseases which cannot satisfactorily be treated by any licensed and reimbursed drug in the UK.” Following the change in HMRC’s stance, the company said it had “made the difficult decision to pause the addition of new patients” while continuing to serve those already enrolled.

The Treasury maintains that “in certain circumstances the giving of goods away for free can be outside the scope of VAT,” and that where supply does fall within scope, a relief may apply. A government spokesperson said: “We are in active discussions with the sector. We fully recognise the importance of early access and compassionate use schemes and are fully committed to ensuring patients can continue to benefit from them.” A government source added that there had been no recent changes to UK VAT policy.

Lopez was unconvinced. “Even if HMRC has paused this damaging VAT charge, and it’s still not clear, the harm has already begun,” she said.

For an industry that contributes more than £17bn annually to the British economy and employs tens of thousands in high-skilled research roles, the affair has crystallised wider anxieties about the predictability of the UK tax environment. With the government banking heavily on life sciences as an engine of post-Brexit growth, ministers will be acutely conscious that a swift and unambiguous resolution is now needed — not least to reassure the international boardrooms where the next round of investment decisions is already being weighed.

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HMRC backs down on free-drugs VAT raid as pharma giants threaten UK exodus

More than 300 pubs, bars and restaurants have served their last pint and plated their last cover since the start of the year, as Britain’s licensed trade groans under the combined weight of higher wage bills, stubborn energy costs and customers who are quietly drinking and dining at home.

Fresh analysis from CGA by NIQ, the market research group, shows the number of licensed premises across the UK slipped to 98,609 by the end of March, a net loss of 305 venues since December, or rather more than three closures every single day. Coming on top of the 382 sites lost between September and December, the figures mean the country has shed 0.7 per cent of its licensed estate in just six months.

It is a slow-motion contraction that is now accelerating. Casual dining has been hit hardest, with the number of restaurants in that bracket falling by 0.9 per cent in the first quarter alone. Bars, nightclubs, traditional pubs and social clubs have also gone to the wall as households defer the small discretionary treats, a Friday curry, a midweek pint, a birthday dinner, that have long propped up neighbourhood operators.

Behind the headline numbers sits a familiar but increasingly toxic mix of cost pressures. April’s rise in employers’ national insurance contributions, the upward ratchet on business rates and persistently elevated food prices have eaten into already wafer-thin margins. Energy bills, which many operators had hoped would ease this year, have instead been pushed higher by the war in the Gulf, with wholesale gas and fuel prices feeding through to suppliers and threatening another round of menu price rises that publicans are reluctant to pass on to bruised customers.

Karl Chessell, director of hospitality operators and food at NIQ, said confidence among both businesses and consumers remained stubbornly low and warned that “geopolitical crises are likely to cause more damage in the months ahead”. While many operators had “shown remarkable resilience”, he said, “thousands are now nearing breaking point”.

“Soaring costs have taken a heavy toll on hospitality in the first quarter,” Chessell added. “Without targeted support, more closures can be expected over the rest of 2026.”

The trade is now lobbying ministers in earnest for a sector-specific package, a permanent reduction in business rates for hospitality, a lower rate of VAT on food and drink in line with much of continental Europe, and a softening of the national insurance changes for smaller employers. Operators argue that the alternative is the slow hollowing-out of the British high street, with independents and chains alike disappearing from market towns and city centres at a rate not seen since the depths of the pandemic.

For now, the maths is brutally simple. Wages, energy and tax are all rising; footfall and spend per head are not. Until that equation shifts, through policy, peace or a meaningful rebound in consumer confidence, the country’s pubs, bars and restaurants will keep going dark, three a day, one local at a time.

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Three licensed venues a day are going dark as Britain’s hospitality sector buckles