In autumn of last year, then Chancellor Sajid Javid cancelled the Government’s budget due to the upcoming election. The fiscal statement was subsequently rescheduled for 2020, meaning the Government had failed to explain its financial plans to parliament for the entire year — the first time this has happened in recent memory.
The next budget, billed for the 11th of March, therefore takes on additional importance. It will also be the first of this decade and of Boris Johnson’s premiership, meaning it could set the tone for years to come.
Those of us in tech will be watching on with keen interest; the sector may be particularly susceptible to the effects of Brexit, so the stakes are high. The question arises naturally, then: what can we expect from the budget for tech? And what can the government do to support us?
Hopefully, some clarity around immigration
The skills gap in tech is currently severe, and with Brexit threatening to create additional resistance for the flow of talent, many firms have concerns it may get worse. After all, the lifeblood of all business is talented people at work.
As such, many are hoping that the Government will provide greater clarity around their plan for immigration. Of course, they have already outlined some plans; some details about how the points-based system will work have been released, as have talk about ‘approved companies’ and ‘skills-levels’. Naturally, this stirred some up some controversy. After all, it is unlikely that any entrepreneur entering the UK will have had the opportunity to register their startup with the government prior to submitting their application.
So, the tech sector will be keen to receive greater clarity regarding the immigration plan. Failure to grant entrepreneurs access to the UK’s tech industry will inevitably result in a decline in sector growth.
Entrepreneurs’ relief to be scrapped
Entrepreneurs’ relief offers a reduction in capital gains tax from 20% to 10% on the first £10 million made, and so many tech startups might have concerns that it being discontinued will make securing new investment more difficult.
Abolishing this relief could result in a rapid decline in startups across the UK. So, the industry will be keen to understand exactly what the future holds for the relief. If the Chancellor does decide to end it, it will be hoped that suitable incentives are introduced to replace it, to ensure that the Government continues to nurture the entrepreneurial spirit of the UK.
More spending on digital infrastructure
The tech sector would greatly benefit from investment in improving the country’s digital connectivity. Much of this will be delivered under the National Infrastructure Strategy, including the rollout of 4G to 95% of the UK as part of an agreement made with EE, Three, and others.
The Government is also likely to recommit to 5G spending, which will allow tech to implement the Internet-of-Things with greater ease due to reduced latency. Further, due to the plan to connect the country from the ‘outside in’, those in rural areas and those who work remote will feel closer than ever before, helping connect firms to talent, and encourage budding tech entrepreneurs outside of the capital to build their own companies.
Greater focus on cybersecurity
Here’s hoping that the Government takes steps to invest more into protecting the digital landscape, too. Whilst they have promised £100 million to upgrade existing hardware and make design processes more resilient, it’s too soon to say whether this will be sufficient.
Cybersecurity has grown massively over the past few years, with almost 50,000 people now working in it. Revenues in the sector have also grown by a huge 46% since 2016, so the budget will hopefully reflect this by offering more detail about Boris Johnson’s vision for it.
There has been some progress in the teaching of technical subjects over the past few years. More children than ever before are learning to code, and now the Government plans to introduce T-Levels to help further encourage STEM-focused education. The National Retraining Scheme may also help create more highly-skilled workers for the sector, as well as helping older people become economically active in the digital economy. Here’s hoping the Government reflects the severity of the skills gap in its plan for tech education.
Looking forward, it’s clear that the Government broadly has some strong ideas for the tech sector, despite how long overdue leadership has been. However, with the Brexit transition process still underway, and the future of immigration yet to be entirely clarified, many firms will still have concerns for the future. So, it is vital that a clear plan of action is outlined, to reassure the tech sector that it will continue to receive adequate support, and consequently grow in the years to come.
Yiannis Faf is co-founder of the crowdfunding app, WhatWeWant. The app, which Yiannis created alongside his family, allows users to upload what they want for an upcoming event for themselves, or someone else. Users can contribute to what their friends and family want as well as notifying them to contribute to whatever you have uploaded. Once enough has been raised, users simply use the money to buy their dream gift, cutting out a lot of stress, wasted money and unwanted gifts.
"Looking forward, its clear that the Government broadly has some strong ideas for the tech sector, despite how long overdue leadership has been."
Yiannis Faf, co-founder, WhatWeWant