The commitments outlined in #Budget2015 clearly demonstrate the importance that connectivity and the tech industry now hold in the mind of government. Below we hear from some big hitters and numbers folk on each of the headline tech policies.
“Today’s Budget announcement demonstrates that tech is essential for ensuring the UK’s long-term economic success,”
said Julian David, CEO of techUK.
“The smart use of tech is fundamental for balancing the books, increasing productivity, creating new jobs and including and empowering people across the UK. By investing in infrastructure, innovation and entrepreneurship the government is driving growth, not just in tech, but across the whole UK economy. Combined with continued ambition for digital government, today’s package strengthens the UK’s position as a leading global digital economy.”
On chancellor George Osborne’s slated creation of a “Northern powerhouse”, to include £140m in world-class research into building cities of the future, Neil Crockett, CEO of Digital Catapult, said:
“The Internet of Things (IoT) is a key area of growth for the UK’s digital economy, a factor recognised by the Government with today’s investment announcement. We are proud to be a partner in this project, enabling collaboration between innovators, organisations and academics who, together, can put the UK at the forefront of a new wave of business models that will make the UK more competitive and a better place to live. It means that the UK can be IoT leaders rather than just IoT consumers.”
While Ami Shpiro, founder of co-working space Innovation Warehouse, supports the creation of tech innovation zones outside of London, he said:
“What we really need is more support for small businesses, more investment in education and skills, and an immigration policy that allows us to pick the best and brightest. High-speed broadband will prove vital to improving connectivity and driving productivity, which has increasingly been a problem in Britain.”
On Osborne’s commitment to high-speed internet, Scott Cairns, CTO at the corporate arm of Deutsche Telecom in the UK, T-Systems, said:
“The commitment in the budget to deliver 100 mbps to all UK premises is a noble one, but what often throttles our digital experience right now is not the top speed, but the contention ratios – the number of people trying to fight for a share of the particular piece of fibre that runs to your door. If 100 mbps is to be an achievable target, we need to ensure that providers are forced to maintain lower contention ratios, thereby allowing the available bandwidth to be available to all.”
The Society of Motor Manufacturers and Traders (SMMT) understandably welcomed the investment pledge for innovation in our cars. Mike Hawes, SMMT chief executive, said:
“The £100m injection into connected car research, development and testing – to be matched by industry – will provide a vital boost to the UK automotive industry and put us ahead in the global race to build the cars of the future. In addition, we’re pleased that government has recognised the importance of China, which is now the automotive industry’s biggest export market. Sales of British-built cars there have grown seven-fold in the past five years. This funding will help us to further capitalise on this opportunity, and strengthen the significant work SMMT is doing to grow the UK automotive presence in China.”
Beyond the headline investment figures, some are worried that SMEs may be being shortchanged. James Pattison, CEO of Startup Direct, which provides funding, mentoring and support to startup businesses, said:
“The simplification of the tax system will be music to the ears of stressed business owners and sole traders, many of whom may now feel more able to handle their own tax affairs and save accountant’s fees. However, it’s a shame the Government didn’t go further to boost enterprise and support SMEs, which have been the driving force behind the economic recovery so far.
“A pledge to fund the creation of co-working spaces for start ups would have been a cost effective way of delivering real, practical help to people wanting to start or grow a business, in an inspiring, efficient and super-collaborative environment. The Chancellor has missed a trick which would have delivered maximum help to entrepreneurs with minimal government investment.”
Tina Riches, national tax partner at Smith & Williamson accountancy, warned startups about stricter tax rules:
“The government has announced that legislation will be introduced to prevent entrepreneurs’ relief applying to certain disposals of shareholdings, where the holding structure for the shares is considered to have been contrived for the purpose of obtaining the relief. New legislation will also be introduced to prevent entrepreneurs’ relief being claimed in the disposal of personal assets used in company or partnership business under the ‘associated disposal’ rules, unless there is also a contemporaneous disposal of at least a 5% share in that company or partnership business. There has previously been no minimum requirement to the size of withdrawal from the business. The new measures will affect disposals of assets on or after 18 March 2015.”
Yet again, she said, it’s clear the government is keen to create anti-avoidance rules to clamp down on perceived abuse.
“The government has announced new measures to prevent the utilisation of brought forward corporation tax losses where the entitlement for utilisation has only arisen due to an artificial or contrived arrangement. The new measure will be effective from 18 March 2015, and will also catch existing arrangements already in place, to the extent that the arrangement generates taxable profits on or after 18 March 2015. For companies with an accounting period straddling 18 March 2015, taxable profits will be allocated into notional periods before and after that date, with the new rules applying to the notional period commencing on 18 March 2015, based on a time or otherwise just and reasonable basis.”