March 2015: A Bumper Budget for Technology
With 50 days to go to the General Election, the UK’s Chancellor of the Exchequer George Osborne today delivered his sixth, and possibly last, Budget as well as unleashing a host of key government reports, responses and strategies. Whether you believe “Britain is walking tall again” depends on which side of the house you sit on, but at Delany & Co we are much more interested in what the Budget means for the innovative technology space. From that perspective it’s a bumper budget, with the government announcing a host of measures intended to make the UK a world leading hub for tech companies and placing technology at the heart of many of the solutions for the UK’s economic and social challenges.
From our initial analysis there are seven key technology announcements:
- Sharing Economy – On the back of a government-commissioned report by Debbie Wosskow on the sharing economy earlier this year, Osborne today announced “a package of measures to help unlock the potential of the sharing economy”, as part of his growth strategy, agreeing with Wosskow that “Britain [can be] the global centre for the sharing economy”. The government’s response to Wosskow’s report was published alongside the budget, which includes a promise to change legislation to make it easier for individuals to sub-let a room, a commitment to further digitise and speed-up the process of applying for criminal record checks, which will greatly help efforts to build trust and security into sharing platforms, and the launch of two pilot sharing cities, in Leeds and Manchester.
- FinTech – Osborne emphasised once again that “the government wants the UK to be the world’s leading FinTech hub”, and announced a plan “to support innovation across the whole of the UK while safeguarding financial stability and consumer protection”. Measures include increasing competition in the banking market, so that “banks, alternative providers and financial technology firms can compete vigorously and on a level playing field, to win and retain customers” (see the separately published report Banking for the 21 Century: driving competition and choice), helping FinTech firms gain access to banking data, and plans for the Financial Conduct Authority, HM Treasury and the Prudential Regulation Authority to work together on a regulatory “sandbox” for financial services innovators.
- Digital Currencies – In the context of the government’s wider FinTech ambitions and alongside another report published today – the government’s response to its digital currencies consultation – Osborne announced the intention to “foster a supportive environment for the development of legitimate businesses in the digital currency sector so that the UK can see some of the benefits of digital currencies, while also creating a hostile environment for illegal activity”. Specific plans include applying anti-money laundering regulation to digital currency exchanges in the UK, funding a £10m research initiative that addresses the opportunities and challenges for digital currency technology, and working with the British Standards Institution and the digital currency industry to develop voluntary standards for consumer protection.
- Digital Infrastructure – Boasting that the Coalition government has “transformed the digital infrastructure of Britain over the last five years”, with “over 80% of the population [now having] access to superfast broadband and…6 million customers [using] 4G”, Osborne laid out his strategy for staying ahead, publishing today (yet another major government paper), the Digital Communications Infrastructure Strategy. The Strategy includes a new ambition for ultrafast broadband of at least 100 Megabits per second to nearly all UK premises, committing to test the latest satellite technology to better reach the remotest communities and providing funding for Wi-Fi in all public libraries. The Chancellor also stated that a Tory government would use up to £600 million to “clear new spectrum bands for further auction and further improve mobile networks”.
- Internet of Things – Further investment was also promised in IoT, which Osborne described as “the next stage of the information revolution” and would allow Britain to connect up everything from urban transport to medical devices to household appliances. £100 million has been set aside for R&D into Intelligent Mobility, which will focus on enhancing developments such as driverless car technology and telecommunications. A further £40 million will be invested in demonstrator programmes, business incubator spaces and research hubs to develop applications for IoT technologies in healthcare and social care, and for Smart Cities.
- Smart Cities – In addition to the announcement on IoT, Osborne committed almost £140 million to world-class research across the UK into infrastructure and cities of the future to “to make the UK a global leader in emerging markets and technologies, drawing on and supporting the UK’s existing world-class research base”. Working with the UK Collaboratorium for Research in Infrastructure and Cities, the government will ensure that the UK’s infrastructure is resilient and responsive to environmental and economic impacts with hubs in London, and further centres initially in Birmingham, Newcastle, Sheffield and Southampton. The government will also support a competition to fund a Smart Cities as part of the IoT programme to trial and showcase these new technologies.
- Digital Government and Public Services – There were many signs that the government is continuing to move forward with its Digital Strategy. Nothing made this clearer than the abolishment of the annual tax return. HM Revenue and Customs will now automatically collate the tax affairs of millions of Britons from employers, banks and investment firms into a single “digital” tax account that can be checked at any time online. The dreaded annual tax return is no more.
Last but not least, is the promise that “the government will…engage with business to determine where regulations inhibit innovation, including disruptive technologies, and develop a programme for addressing this in the next Parliament.” This is great news from our point of view, and really sums up a government that seems determined to focus on the positive potential of technology and find ways around the risks and barriers instead of being deterred by them. Of course the UK General Election is now a matter of weeks away, so whether Osborne and his colleagues will be in government to deliver on these promises remains to be seen.
Chancellor George Osborne’s speech can be seen in full here. The March 2015 March Budget is available here.
By Victoria Read and Samir Nanji
Photo Credit: Alamy