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Oscar Williams

News editor

What the Spring Statement means for the UK tech sector

Philip Hammond today pledged to keep “Britain at the forefront of new technologies” as he unveiled the Spring Statement to Parliament. The chancellor laid out plans to boost digital connectivity, improve the country’s digital skills and change the way tech firms are taxed.

Digital connectivity

Hammond revealed that the government has allocated £95m for full fibre broadband networks in 13 areas across the UK. The pledge marks the release of the first wave of capital from the £190m local full fibre network fund unveiled in the Autumn Budget.

Manchester, North Yorkshire and Belfast are among the biggest beneficiaries of the funding, which will continue to be released in successive competitive waves. One of the successful bidders plans to turn hospitals, health centres and GP surgeries into “anchor tenants” for the rollout of full-fibres hubs encompassing nearby homes and businesses. Another intends to create “fibre spines” running along transport routes and public building networks, extending suppliers’ footprints.

Antony Walker, deputy CEO of trade association TechUK, said the announcement “shows ongoing commitment to concrete steps towards the delivery of improved digital infrastructure”.

Skills

The statement also outlined a £50m fund for helping employers roll out new T-levels for technical education. Walker said they could have a “positive impact on improving digital skills” but that they won’t be successful unless businesses of all sizes can “engage effectively in their delivery”. KPMG’s vice chair Bernard Brown added that the government needs to continue to invest in STEM subjects: “The UK is already facing the prospect of losing 53 percent of our European IT workforce post-Brexit, according to a KPMG study. If the Government doesn’t do more to incentivise the UK’s digital economy then we will face a shortfall in our tech skilled workforce.”

Tech tax

The chancellor confirmed that the government is investigating different ways to tax firms such as Google and Facebook. He said corporation tax rules “must respond to the modernisation of the economy and deliver appropriate results for digital business that generate value in unique ways”. Ministers have previously said the government is considering taxing tech firms’ revenues rather than their profits. TechUK’s Walker described the issue as “highly complex” and said “international cooperation and coordination are key”, adding: “Unilateral action in this area continues to risk cutting across international efforts at the OECD.”