Time to invest in tech
Yiannis Faf, co-founder of WhatWeWant, discusses how the spring budget announcement will affect the tech start-up industry
Barely a month after becoming chancellor, Rishi Sunak delivered his first budget on 11 March 2020. This would have been a significant event in itself. However, the sudden escalation of the Covid-19 outbreak meant that much of Sunak’s original budget had to be re-written in order to offset the virus’ financial impact on the UK.
As such, some reforms were put on the backburner. And even then the escalating threat of the virus has meant that some of Mr Sunak’s announcements are somewhat outdated, as new measures have been introduced to help businesses survive such uncertainty.
So, the question is, what impact will the budget 2020 have on the long-term prospects for the UK tech sector?
Investment in our digital infrastructure
The future of digital infrastructure in the UK hinges on increasing 4G network coverage nationwide, in addition to the introduction of 5G. Digital connectivity is a crucial factor in driving the future growth of the UK tech sector and the UK economy in general, but at present, a little over 14% of the UK can access 1000Mbps+ capable fixed broadband network.
Sunak declared that ‘this is a budget for people right across the country – no region will be left behind’; and indeed, it appeared to be just that, with the chancellor pledging £5bn to provide every UK home with gigabit-cable broadband by 2025.
The budget document states that the latest investment will help households in the hardest-to-reach areas of England, Scotland, Wales and Northern Ireland, which in turn should strengthen local economies and inspire a new generation of tech entrepreneurs. This should go some way to dispelling the perception that one must be based in London in order to launch a successful start-up – better internet connection will be a vital tool in enabling rural communities to fulfil their potential.
However, plans to increase investment are one thing, but we should be mindful that this is not the first time a government has promised to enhance the country’s digital infrastructure. We now need to see a clear and decisive plan in place for the roll-out of gigabit cable broadband. Only then, will tech entrepreneurs and businesses be able to plan for the future with confidence.
There is much to be gained from this initiative, so the government should act quickly so that the necessary support is provided, and the UK can nurture talent and technological innovation outside of the capital.
Relief for SMEs
With mounting uncertainty surrounding the outbreak of the coronavirus, the chancellor has stated that thousands of small firms will be exempt from paying business rates for a year as part of emergency measures to shore up the economy. As a result, all retail, leisure and hospitality businesses with a rateable value of less than £51,000 will not pay any business rates for the next financial year, offering a welcome lifeline amid the chaos.
However, as the threat of Covid-19 grew at an astounding rate, these recent actions no longer seemed adequate to help businesses weather the storm. So, on Tuesday 17 March, Mr Sunak went a step further, and announced a business rate holiday for small firms “irrespective of their rateable value”. On top of this, an unprecedented £350bn package – £330bn to be offered as business loans and £20bn in other financial aid – to further cushion the inevitable financial blow faced by businesses across the UK.
While businesses across the UK – both within and outside of the tech sector – inevitably face months of uncertainty, it was encouraging to see Chancellor Rishi Sunak dedicate substantial funds to start-ups and SMEs. Of course, the circumstances are changing every day, and the government must continue to adapt and evolve its strategy. Otherwise, we may see the decline of UK businesses, not to mention the UK’s thriving tech sector.
Yiannis Faf is co-founder of the crowdfunding app, WhatWeWant. The app allows users to upload what they want for an upcoming event for themselves, or someone else. Users can contribute to what their friends and family want as well as notifying them to contribute to whatever you have uploaded. Once enough has been raised, users simply use the money to buy their dream gift, cutting out a lot of stress, wasted money and unwanted gifts.