techUK responds to the March 2020 Budget

12 Mar 2020 10:31 AM

techUK CEO, Julian David, responds to the Chancellor of the Exchequer's March 2020 Budget.

Yesterday the Chancellor of the Exchequer unveiled the first budget of the new government promising to level up the UK, take on the climate emergency and support the economy through the impacts of the COVID-19. 

The Budget also gave the first indication of this Government’s agenda for tech, and how this pro-tech Government will seek to deliver for the sector:  

Responding to the Budget statement, techUK CEO Julian David said: 

“The new government has described itself as pro-tech and this budget has provided the first indication of what this means in practice by focusing on digital infrastructure and research and innovation. Whilst the Chancellor rightly concentrated on the government’s fiscal response to Covid-19, providing extra support to the NHS, businesses and individuals, this government clearly also has a plan and vision for the future with tech at its heart.

“A huge boost in R&D spend, investment in digital infrastructure to boost connectivity and a commitment to level-up on skills contribute to a package that will ensure UK tech stays ahead of the game and continues to contribute to growth and prosperity for people, the economy and the planet. The creation of a UK ARPA shows a radical and refreshing approach from Government that techUK strongly supports. Similarly, the reopening of the Climate Change Agreement on Data Centre demonstrates a commitment to delivering on Net Zero whilst continue to grow and innovate. 

“However, the government’s decision to push ahead with a Digital Services Tax, despite clear question marks remaining on scope, cuts against the grain. techUK calls on Government to pause the introduction of a UK DST and refocus its energies and efforts on finding a solution at OECD-level.

“The tech sector is the UK’s modern success story and vital to delivering on the Government’s ambition to create a high-skill, high-wage economy that is fit for the future. techUK looks forward to working with the Chancellor and across Whitehall to ensure that the vision set out is implemented in a clear and coherent way that continues to support the UK’s digital economy.” 

Across the Budget we saw a number of announcements relevant to the tech sector:  

Investment in broadband and 5G infrastructure: Digital connectivity is crucial to levelling up the UK. The government’s investments in the rollout of gigabit-capable broadband and 4G infill are welcome. However, to ensure this investment is deployed effectively the Government must set out a comprehensive road map to provide confidence to investors to truly get gigabit capable broadband done by 2025.  

Increased investment in R&D and innovation: The government has provided a comprehensive package of R&D support and an ambitious plan to boost R&D spending to £22bn - this is a significant uplift that puts the UK back in the global race. techUK looks forward to working with government as it further develops its road map to 2.4% and beyond. 

techUK welcomes the delivery on the commitment to increase the R&D tax credit from 12 – 13%. In developing these plans further, the emphasis must be on ensuring an approach which is user friendly at its heart, ensuring businesses of all shapes and sizes are confident in drawing down on these reliefs. 

The creation of a UK ARPA: The creation of a high-risk, high-reward research agency based on DARPA is an extremely welcome announcement. A UK ARPA offers an opportunity to fundamentally change the way we do R&D in this country, realising that for big challenges failure can be as valuable as success. To succeed, the Chancellor must focus on delivering a challenge-focused, light, agile and ambitious agency. To be a long-term success ARPA will require cross-party support that stands by it through its failures as well as its successes.  

Bridging the digital skills gap: Bridging the digital skills gap will increase productivity and lead to future economic growth, yet 53% of workers currently do not possess the necessary digital skills for success in today’s economy. The investments in a National Skills Fund and Institutes of Technology show that Government recognise the challenge but perhaps not the scale. The country will need a radical rethink on adult education and retraining if we are to fully benefit from the opportunities of the future.  

Reopening of the climate change agreement: The re-opening and extension of the Climate Change Agreement scheme is a major victory for the data centre sector in its ambition to make the UK the world’s host for green data. This step demonstrates that UK government recognises the importance of our digital infrastructure and aims to provide a business environment in which our operators can thrive. The premature closure of the sector’s Climate Change Agreement has prevented new entrants from joining the scheme since the middle of 2018. Re-opening should mean new data centre sites are be able gain the benefits of the scheme, the Government should also be open to further extensions.  

Data in Government: techUK welcomes the government’s commitment to unlocking more value from knowledge assets to help support UK innovation and productivity. The announcement of £16.4 million to facilitate more data sharing across government will be a key enabler for driving deeper insights and better policy decisions. We particularly welcome the government’s emphasis on the need to build greater public trust and confidence in this area. For the full benefits of data sharing to be felt across the wider economy we need to ensure that this data, where appropriate, is open and accessible to businesses, to enable them to build better products and services for everyone.   

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