A Budget with tech at its heart

Theo Knott, Policy Programmes Manager at BCS, analyses the 2018 Budget and its potential impact on the tech industry.

The Budget in recent years has been a restrained affair. A combination of political and economic uncertainty, in addition to a Chancellor for whom the word ‘flamboyance’ could never be attributed, has resulted in even the political obsessives amongst us nodding off during 90 minutes of statistics, Dad jokes and predictable opposition responses.  

This Budget was different. Over the past months, it has become progressively clear that the government appreciates the vital importance of the tech sector; both in terms of the enormous economic and social benefits that it produces and existing and forthcoming pitfalls from it that need to be mitigated through regulation. This Budget seemed to really encapsulate that burgeoning understanding and was certainly the one most focussed on technology in recent memory. It is no mystery as to why it was also the most interesting. 

The headline technology development was the announcement of a ‘Digital Services Tax’, specifically designed to target multinational tech companies like Google, Amazon and Facebook, who use their global reach to minimise the amount of tax they have to pay. While this was good newspaper fodder and that rare beast, a tax rise popular with the public, in reality it’s only likely to raise £500 million per year, which is effectively change down the back of the sofa for the companies the tax aims to target, and the UK Treasury. To put this into perspective, £500 million would cover UK government expenditure for about six hours.

Much more important were announcements behind the front pages, such as about the Industrial Strategy, which BCS has focussed on since it was an embryonic green paper released two years ago. Since the release of that green paper, we have been involved in improving its provision along with Engineering the Future and a number of its ‘Sector Deals’ for new industries. Consequently, it was heartening to see around £1.6 billion of further funding committed to the strategy, with much of it being designated for technology projects.

This included up to £121 million of funding for ‘Made Smarter’, which supports the advancement of the Internet of Things to improve productivity in manufacturing. Additionally, more money was also provided for the development of quantum technologies, in particular the creation of a new national quantum computing centre.

BCS has been at the heart of government decision making in AI for some time, whether that be through involvement in the AI industrial masters programme or Dame Wendy Hall, former BCS President, carrying out the government’s review into the future of the AI industry in the UK. Resultingly, one of the real positives coming out of the Budget was a redoubling of government commitment towards AI projects.

This included £50 million of funding put towards developing AI talent in the UK and clarification as to how the government intends to try and utilise the benefits of AI through a forthcoming review by the Office for AI. This is building upon existing funding worth almost £1 billion funnelled through the AI ‘Sector Deal’, which commenced earlier in the year.

Listeners of Budget’s past may recall what seems to be an annual refrain of ‘we are bringing full-fibre broadband to every house in the nation’, without much tangible change to the quality of the internet connection in their homes. This Budget was no different, with an extra £200 million being allocated to pilot schemes aimed at getting full-fibre to schools, especially those in rural areas like the Welsh Valleys and Scottish Borders. While government rhetoric on broadband rarely seems to tally with the reality of the situation for those of us outside of cities, this was still to be welcomed, as there is growing evidence that children are disadvantaged by poor internet speeds compared to their peers with better connections.

There were numerous other technology policies that were covered by the Budget that can’t be covered in depth within an 800-word blog. These included more money to the digital catapult scheme, the creation of ‘field labs’ to test blockchain technology, an expansion of cybersecurity funding and £3 million for a training course pilot on digital skills for Manchester, with the potential to be replicated wider in the future.

The point is that in years past, there would be no need to go over key provisions in the Budget regarding technology with such brevity, because there wasn’t an enormous amount to cover in the first place. There were still omissions, of course, with areas such as the lack of diversity in IT and the STEM skills shortage not being given the overt attention they deserve, but less than has been the norm.

On the evidence of this Budget, there is a palpable sense of change towards policymakers truly understanding the central role that technology must play in any serious conversation about the nation’s economic health. The proof will ultimately be in sustained effort rather than the Chancellor talking at the despatch box, but this can be nothing but good from a BCS perspective. Especially when so many of the topics covered are of vital interest to our members, our ongoing work and where we will undoubtedly be involved going forward, both as a professional body and as a nation.

About the blog

The BCS Policy team works to inform and drive the debate on public and private IT policy developments.

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November 2018
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