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What this year’s Budget means for the tech sector

This year’s Budget might not be as tech-centric as 2017’s, but it still includes a number of eye-catching policy announcements. Here’s a rundown of the key developments.

Digital Services Tax

Philip Hammond finally outlined his long-awaited Digital Services Tax in Monday’s speech. The tax will amount to two per cent of companies’ UK revenues, come into effect in April 2020 and only be levied on profitable digital services businesses with revenues of over £500m.

It is expected to raise £400m a year, a small sum of money in the context of UK government spending, and has drawn a mixed response from the industry.

Russ Shaw, the founder of Tech London Advocates, criticised the government’s decision to take a unilateral approach to the issue. “Digital tax is a universal problem, and must be taken on in that manner. Any other approach makes Britain economically vulnerable, and risks damaging our tech sector in the long run.”

But the Labour MP Darren Jones praised the move. In comments shared with NS Tech, the former tech lawyer said that while “the devil will be in the detail, […] I do applaud the Government for trying to get on with this issue of taxing global tech companies properly whilst still trying to secure global agreements with other countries.”

AI pledges

GDS’s AI review

The Office for AI and Government Digital Service have been tasked with exploring how the public sector and wider industry can make the most of artificial intelligence, machine learning and automation. The Data Science Campus at the ONS and the GDS will also conduct an audit of data science capability across the public sector.

The Centre for Data Ethics’ algorithmic bias investigation

The Centre for Data Ethics and Innovation has been commissioned to carry out an investigation into algorithmic bias, following recommendations from the Science and Technology Select Committee. Jones, a member of the committee, welcomed the move, but said he hoped that “we don’t need to wait for the annual Budget to fund every area of policy this important centre needs to look at”.

New funding for the Turing 

The Chancellor pledged to invest £50m “in new Turing AI Fellowships to bring the best global researchers in AI to the UK, and £100m in an international fellowship scheme”.

£1.6bn for R&D

Like last year’s budget, this year’s puts a big focus on research and development. As part of this vision, the government is investing a further £1.6bn in R&D funding. The additional funding will support the Industrial Strategy Grand Challenges and “secure the UK’s position as a leader in new and emerging technologies” such as AI, nuclear fusion and quantum computing, the Treasury said.

Jordan Morrow, global head of data literacy at Qlik, welcomed the funding, but added that “the Government must ensure that it not only attracts the best technical expertise and invests in technological development, but empowers the entire nation to feel more comfortable with data and the technologies that will underpin the future of work and ensure that the UK is a thriving technology innovator”.

The Ministry of Defence gets extra cyber security funding

The MoD has been granted an extra £1bn to ensure that the military “can continue to modernise”. A key part of this strategy is around “offensive cyber” and it’s likely the funding will go some way to expanding the MoD and GCHQ’s existing cyber weapons unit. The Times and Financial Times reported last month that the UK was looking expand the unit from 500 to 2,000 staff.

A GCHQ spokesperson told NS Tech at the time: “The MoD and GCHQ have a long and proud history of working together, including on the National Offensive Cyber Programme. We are both committed to continuing to invest in this area, given the real threats the UK faces from a range of hostile actors.”