Spring Statement – focus on innovation, entrepreneurship and tech
The Chancellor of the Exchequer today delivered his 2019 Spring Statement, in which he focused on job creation in the economy and laid out the state of the public finances and the UK economy in these uncertain political times.
The Chancellor championed tech and the digital economy, stating his belief that technology will be at the heart of the national effort to boost productivity and that UK businesses were at the front of the technological revolution. He also made clear that, as long as a Brexit deal is agreed, he would conduct a full spending review for the next three years which would be started over the summer, the results of which would then be announced at Autumn Budget. This spending review would seek to invest in UK infrastructure to boost long term productivity growth.
Deal or No Deal
On the elephant in the room, the Chancellor made it clear that a no deal Brexit would be damaging to the economy in the short, medium and ultimately reduce the UK’s economic power in the long term. Although the Chancellor provided assurances that should a deal be reached, there would be some fiscal headroom for more investment into the economy, no amount of fiscal or monetary intervention would be able to mitigate the negative impact of no deal.
Should the UK leave the EU with a negotiated deal, the Chancellor talked about his economic plan, which very much championed innovation, technology and entrepreneurship. He reiterated the government’s commitment to embrace technologies of the future and equip people to use them, ensuring the UK’s digital economy remains at a competitive advantage.
Investing in People
It was encouraging to hear the Chancellor reiterate the importance of attracting the best and brightest talent into the UK, ensuring that we have the skills we need as free movement ends from the EU. He also announced that PhD students would be exempt from the visa cap, further demonstrating the UK’s commitment to highly skilled talent from around the world. More about the future immigration system can be found in the immigration white paper, published earlier in December 2019.
Commitment to technology
In his statement, the Chancellor highlighted the openness of the UK economy to global talent with the exemption of PhD level roles from the visa cap, while also committing to invest in tech. There will be investment in UK digital research with a £79m investment in ARCHER2, a new national supercomputer at Edinburgh University, £45m to the European Bioinformatics Institute for genomics research and £81m in a new Extreme Photonics Centre in Oxfordshire to develop new types of lasers – highlighting the importance of new and emerging technologies in order to future-proof the UK economy.
In addition to his fiscal commitments, the Chancellor announced the recommendations from the Furman Review. The recommendations focus on ways to update the regulatory model for large digital platforms, while seeking to ensure that the UK remains a great place to do business, as well as a country where digital competition works for everyone. It was also announced that the UK competition authority, the CMA will conduct Market Review of digital advertising.
Responding to the Furman Reviews recommendations Gerard Grech, CEO of Tech Nation said: “The digital tech sector is thriving and was worth nearly £184bn to the UK economy in 2017. These recommendations, which aim to encourage competition and provide opportunities for new businesses, are important to ensure the tech sector’s continued growth. Encouraging large companies to open up data sets to startups and scaleups would open new markets for innovative companies, and we know that activity like this drives innovation.“
The digital services tax, which was announced at budget, was also mentioned in the Chancellor’s speech further highlighting his commitment to regulating unfair practices in the digital economy.
Overall while many of the takeaways from 2019’s Spring Statement will be looking at the projected impact of potential Brexit scenarios, the Chancellor was unequivocal in his support for and belief in highly-productive UK tech, and it’s role in Britain’s future.
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