Monday, 26 June 2017

UK budget: Where's the investment in skills, innovation?

Comtek
Thursday 09 July 15

In yesterday’s UK Summer Budget, the first Tory budget in 19 years, the Government presented technology businesses with a double edged sword; corporation tax is reduced but little has been done to correct the skills gap. The Budget promises a cut in corporation tax from 20 percent to 18 percent by 2020 and, while there was mention of an apprenticeship levy and the Annual Investment Allowance has been raised to £…

In yesterday’s UK Summer Budget, the first Tory budget in 19 years, the Government presented technology businesses with a double edged sword; corporation tax is reduced but little has been done to correct the skills gap. The Budget promises a cut in corporation tax from 20 percent to 18 percent by 2020 and, while there was mention of an apprenticeship levy and the Annual Investment Allowance has been raised to £200,000, there were absolutely no specific benefits offered to technology companies. The Budget also failed to mention the cut in investment to electrify the railways.

Askar Sheibani, chairman of the Deeside Business Forum and CEO of telecoms repair and support company Comtek (which acquired a Silicon Valley based telecoms equipment manufacturer Sorrento Networks in 2014), offers his comments on why technology companies, in particular, will feel the cuts:

“A double edged sword, sharper on the negative than the positive side, is what George Osborne has offered to technology businesses today. Corporation tax was the people pleaser and this will have a positive impact on business bottom lines across all industries throughout the UK. That wasn’t the whole story, however, and technology companies in particular are set to suffer from the Chancellor’s vague promises around skills and innovation.

“Technology is a fundamental, high growth area for the UK economy, yet it was almost completely overlooked in the UK Summer Budget. This industry is suffering from a potentially critical skills gap, and a generic apprenticeship levy will certainly not balance the labour market. What’s more, as students are hit by the axing of the maintenance grant, this Budget may have done more harm than good for technological innovation in the UK. The technology industry also has some of the highest R&D costs and, although R&D is critical to the progress of the UK economy, this has been essentially ignored by the Chancellor.

“Investment in skills, innovation and infrastructure was needed in the Budget, and none of these have been delivered. Local communities, such as those in North East Wales, are in dire need of support to help them stabilise their own economic future; whether that be in terms of a skilled workforce, reliable broadband or an electrified rail line. The Conservative Government seems to have disregarded this, however, which could prove costly for the UK’s economic prowess not only now, but long into the future.”


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