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New spending on innovation, skills, lifelong learning and connectivity show Chancellor is thinking about how tech can drive future economy.

With uncertain times ahead, yesterday’s Budget laid out new announcements significant for the UK tech sector.

The Chancellor built on the Autumn Statement focus on stimulating tech and innovation with new money for 5G, electric cars and full fibre networks. The Budget’s focus saw a shift in emphasis, with reforms aimed at delivering the technical and lifelong skills that people need to thrive in a world-leading digital economy.

Below is our roundup of the Budget. Our overall verdict: solid foundations for tech, but the Chancellor may have to be a bit more adventurous once Brexit begins to bite.

Boosting innovation

The new £270 million commitment to developments in areas such as biotech, robotics and driverless cars is welcome. Similarly, the £16 million for a 5G hub and £200 million for local authorities to stimulate private investment in fibre networks should be applauded. We’ll be looking at how these announcements line up against the previously announced £23bn Productivity Fund and will enable real digital transformation in the economy. Check out our roundup of the boosts to digital infrastructure.

Skills Reforms and Lifelong Learning

The most interesting area of the Budget, with the creation of T-Levels and a genuine commitment to overhaul the UK’s chronic problems in vocational education and high-level STEM expertise. These large reforms must realise their promise of placing digital skills at their heart but the direction of travel is promising. £300 million for 1000 new STEM PhDs and fellowships is crucial as universities are key drivers of innovation. Perhaps the most innovative area of interest to tech is the £40 million made available to the Department for Education to pilot different lifelong learning programmes. This will be one of the most important policy areas if the UK is to tackle its domestic skills issues and retrain people for the jobs of the future. We’ll be looking out to see how this week’s announcements stack up to the Government’s Digital Strategy.

Business rates for digital businesses

The Chancellor announced the Government would consider reforms to business rates for online businesses ahead of the next Business Rates evaluation in 2022. As the Secretary of State for Culture Media and Sport noted upon launching the Digital Strategy, small and medium-sized enterprises with a strong web presence grow on average more than twice as quickly as those with minimal or no presence, export twice as much, and create twice as many jobs. This process begins with an open and evidence-based dialogue with industry, keeping front of mind the role that online technologies play in driving digital growth for SMEs.

Boosting national commitment to R&D

techUK is looking for the Chancellor to commit to national R&D spend to 3% of GDP, matched by an uplift in R&D tax credits for start-ups and SMEs. The Chancellor said he is satisfied with the competitiveness of the UK’s R&D credit but offered administrative reforms to make them easier for SMEs to access. The business enterprise component of R&D expenditure in the UK remains low by international standards, so we urge the Chancellor to make bold commitments to match our ambitious R&D credentials.

Health and Social Care

It will be fascinating to see the roll out of the first NHS Sustainability and Transformation Plans (STPs) which need to harness the power of digital to deliver the revolution our health and social care system needs. The Chancellor made £325 million to kick off a selection of handpicked STPs this year. techUK has long called for Government to consider its broader ambitions on digital transformation – from capacity and leadership planning to better data sharing so this is a welcome development. Check out the full roundup here.

Energy

Recognising the need to keep costs down for businesses while at the same time decarbonising our economy is hugely important and also an area where tech can lead. We look forward to the new controls to replace the Levy Control Framework and hope the Government will consult with industry on how to design these.

Closing thoughts

Ahead of the Budget, techUK set out a range of areas the Chancellor could consider to truly unleash the next generation of digital growth. With uncertainty ahead, it’s understandable that the Chancellor wants to keep his powder dry but these areas will remain important if the Chancellor wants to realise his ambition for a tech-powered Global Britain.