Budget 2017 : Hammond backs dynamic and innovative economy

Westminster view

Chancellor Philip Hammond announced the Budget today, There was a big focus on tech and innovation but the biggest cheer of the afternoon was support to tackle the housing crisis.

There were some really positive references to strengthening and fuelling the tech and innovation sector with the Chancellor saying we "must invest to secure that bright future... and in this Budget that is what we choose to do". He went on to assert that the "world is on the brink of a technological revolution" and that his aspiration was for a "dynamic and innovative economy". 

Ukie have campaigned against a number of core themes and there was positive news against all of them, in particular the UK Games Fund gaining a further £1m to extend the programme until 2020, aiding access to finance and business support for early stage game developers.

There were wins for:

  • R&D
  • Computer Science and Maths education
  • Access to finance
  • Regional economy
  • Talent and Immigration

There was a boost to the R&D landscape with a further £2.3bn in additional spending announced and an increase to the R&D tax relief from 11% to 12%, new AI fellowships, 5G testbed trials and an expansion of Tech City's reach to become Tech Nation. 

Access to finance was included with a doubling of the enterprise investment scheme allowance and more support through the British Business Bank. Computer Science and Maths were the big winners in Education and Skills with the budget ensuring that every secondary school has a fully qualified computer science GCSE teacher, by committing £84 million to upskill 8,000 computer science teachers by the end of this Parliament. The government will also work with industry to set up a new National Centre for Computing to produce training material and support schools. 

On talent and immigration there was confirmation of the doubling of the tier 1 exceptional talent visa and regionally a £1.7bn Transsforming Cities fund will boost to improve connectivity and support jobs across England’s great city regions.

Responding to the announcements, Ukie CEO Dr Jo Twist said: 

We are pleased to see that the government has announced a further £1 million to extend the UK Games Fund until 2020, alongside improvements to existing important schemes, such as R&D tax credits, and raising the investment limit of the EIS scheme. We also welcome the focus on more investment in local clusters and economies, something we have called for consistently given the strength of the games sector across the UK. These measures show that the government is committed to small businesses around the UK that are innovation driven, such as the games sector. We also welcome the investment in maths and computer science teaching which provides a critical talent pipeline to the industry. We look forward to hearing about more specific and targeted measures that may be introduced in the Industrial Strategy White paper, due to be published in the next few days. We shall continue to push for more investment in skills of the future, securing access to the highly skilled talent that the sector needs, and the creation of culturally exciting British games.

Other things you might have missed include:

Corporate tax and the digital economy: Autumn Budget 2017 announced changes to withhold tax designed to stop primarily digital multinationals shifting profits to low-tax countries to avoid corporation tax. Alongside this, the government call for an ambitious international process to ensure global tax standards are updated for the digital age.

Financing growth in innovative firms: a 10-year action plan to unlock over £20 billion to finance growth in innovative firms. Designed to help innovative, high-growth businesses secure the ‘patient’ investment they need, the plan includes new investment into funds, clarified pension guidance and reform of tax reliefs.

Corporate tax and the digital economy: Alongside Budget the government has published a position paper setting out the challenges posed by the digital economy for the international corporate tax framework and its proposed approach for addressing those challenges. The government would welcome feedback on the contents of the paper. Responses should be sent by 31 January 2018.