Artificial intelligence, 5G and broadband have a £500m investment boost, chancellor Philip Hammond has confirmed in his budget – with a lift on investment and more tax breaks for startups. Julian Blake reports.
Last week the government announced a £61m tech support package, new visas and brought tech to the Downing Street top table. This week, the chancellor committed £500m for 5G, broadband and Ai. You could be forgiven for thinking the government is on a tech business charm offensive, before the post-Brexit traumas that surely lie ahead.
Connectivity, artificial intelligence and driverless cars were the big tech winners, as chancellor Philip Hammond unveiled the government’s spending plans in his budget.
“A new tech business is funded every hour and I want that to be every half hour,” said the chancellor in his speech. “So today we invest over £500m in a range of initiatives from artificial intelligence, to 5G and full-fibre broadband.”
An ‘action plan’ would unlock over £20bn in new investment in UK scale-up businesses, the chancellor added, as £2.5bn via the British Business Bank replaces funds going from the European Investment Bank post Brexit. R&D tax credits rise to 12% and, in a boost for startups, the limit for private funding via the enterprise investment scheme doubles.
The government’s desire to keep UK tech happy is little surprise, given its now-pivotal role in the economy. More than 1.4m people now work in UK digital, with jobs being created at twice the rate of other sectors. Given the talent crunch and a possible post-Brexit recession, many tech firms are considering their options.
Alongside the money for Ai, the government confirmed the introduction of the world’s first national advisory body on artificial intelligence. The new £9m Centre for Data Ethics and Innovation “will set standards for the use and ethics of AI and data”, according to the government, allowing the UK to lead the world in developing practical uses for the technology.
Hammond said new rules would make it possible for fully self-driving cars to be on UK roads by 2021. In a boost for electric vehicles, the chancellor promised a new £400m ‘charging infrastructure fund’ and an extra £100m towards helping people buy battery electric vehicles, along with £40m in charging R&D and changes to building regulations to ensure all new homes are built with the right cables for electric car charge points. £40m will be put aside each year for geospatial data.
On skills, the government confirmed that £30m would go towards digital skills courses distance using Ai, and £100m towards trebling of the number of trained computer science teachers to 12,000. A new National Centre for Computing will be established.
Hammond also announced that he will be extending the National Productivity Investment Fund for a further year, expanding it to over £31bn.
On taxation, Hammond said the government would look to change international corporate tax rules “to ensure digital companies pay a fair amount of tax”. Digital economy royalties relating to UK sales will now be subject to income tax. This is expected to raise around £200m each year
The tax announcement followed the recent leaking in the ‘paradise papers’ of big tech corporate efforts to avoid tax by offshore accounting practices.