The Budget: The Tech Market Reacts

Digital data

The Chancellor released details of the spring budget today which will pave the way for the UK’s digital economy in the near future. Here, we take a look at how the market racted.

Alex Holt, partner and head of TMT, KPMG, commented “Major advances in communications and technology will be vital for the UK, and are perhaps more important now than ever before due to Brexit. The UK should be a leader in digital communications, which is the foundation for the strong social and economic development of the UK.

“Support from Government – no matter how large or small – is welcomed. But the reality remains that major communications infrastructure operators are being asked to invest billions in the UK’s digital future in a less than certain regulatory environment, and a future where the dominant US platform businesses will reap a majority of the economic rewards from that investment.”

Andrew Ellis, Professor of Optical Communications at Aston University, said:

“Economically, investments in internet speeds have shown a healthy 20:1 return. With full fibre broadband and 5G mobile rollout, we can expect to increase national Gross Value Added (GVA) by around £10 billion and to safeguard or create tens of thousands of jobs.

“Given the great disparities in internet provision across the UK, future Government intervention should focus on the less profitable, and therefore under serviced areas – perhaps leapfrogging 4G and G.Fast in some areas and going straight to 5G and fibre-based broadband technologies.”

In December last year, the National Infrastructure Committee chaired by Lord Adonis called on the Government to take action to make Britain 5G ready. It highlighted that Britain is 54th in the world for 4G (the typical user can only access 4G 53% of the time), there are too many digital deserts and partial not spots, even within our city centres.

Stuart Orr, Advisory Partner at EY, comments on investment in fibre broadband:

“The £200m announced today to accelerate the rollout of faster broadband comes at an important time. While the UK scores well compared to other markets in roll out of ‘entry level’ fibre broadband, other countries and their economies are already benefiting from extensive coverage of ‘full fibre’. At the same time, a continued focus on connectivity speeds in rural areas must remain a priority for providers.”

ISPA Chair James Blessing commented:

“ISPA members are investing in their networks, products and services and will be key to delivering Government’s plan to increase productivity. Investment from Government in infrastructure, skills and R&D are positive steps, but it is important that Government continues to reduce barriers to investment and broadband rollout through a clear, joined-up approach”.

Dan Bladen, 27 year old CEO and Co-Founder of Chargifi, the London based wireless charging start-up. It would be fantastic if you were writing something on the budget and wanted to include this.

“There are three major positives that have come out of Hammond’s Spring Budget. Firstly, investment in £270m for robots, driverless cars and biotech is a serious commitment to the role of digital technologies within the industrial strategy. Disruptive digital technology is helping to build a more tech-enabled world which is great for both the electric and automated industries.
Secondly, Hammond has said the government will create a £300m fund for local authorities to help with business rates, as well as a total of £435m in business rates relief for small businesses. As the cost of businesses can be a crippling factor, especially for tech start-ups where the focus on R&D means that revenue and profits are longer term targets, such investment enables small businesses of all kinds to operate at a reasonable price and thus further stimulate the UK economy.