Budget 2013: Industry laments lack of tech talk during Osborne address

George Osborne

The contents of the Chancellor's 2013 spring Budget has been weighed, and found to be light on details about how the proposed measures will benefit the technology industry.

During his Budget address earlier today, George Osborne set out plans to cut the tax employers pay when recruiting staff, with the launch of the Employment Allowance initiative in April 2014.

The move will take the first 2,000 off the employer National Insurance bill of every company, and has been hailed as a major boost for the UK's start-up community.

Simon O'Kane, senior vice president of worldwide sales at cloud provider Huddle, said the introduction of the Employment Allowance scheme, coupled with the Government's planned corporation tax shake-up, is welcomed news.

"Reducing corporate tax will certainly entice more international businesses to set up in the UK, but the focus here should be to buy British...as we are a nation of innovators and there are many great business ideas struggling to get off the ground," said O'Kane.

"[The tax changes] mean more entrepreneurs can take that next step in building their business and hire a team."

Julian David, director general of tech trade body Intellect, said he was pleased to see the Government offer more help and support to start-ups, but said more still needs to be done.

"The Chancellor has taken measures to support tech start ups and SMBs through indicating an upcoming extension to the Funding for Lending scheme, as we called for ahead of the budget," David said,

"However, there must be progress made on ensuring the credit flows to SMEs and start ups in the growing tech sector in order to ensure that this has real economic and on the ground' impact."

Earlier this week Intellect called on the Government to introduce ring-fenced funding for apprenticeship schemes, as well as tax breaks for large tech firms that mentor start-ups, during the Budget.

The organisation put forward the requests as part of its wider bid to get greater recognition for the contribution the tech industry makes to the UK economy.

George Osborne was curiously quiet on tech issues today.

However, David said he was disappointed with the scant references made during Osborne's address to the tech industry.

"It remains a concern that despite representing 12 per cent of GDP, the Chancellor failed to directly reference the UK's tech sector. Tech start ups and growing SMEs are the silicon coloured shoots of growth so needed by UK PLC. The Chancellor cannot afford to take this growth for granted," he added.

This point was also raised by Matthew Finnie, chief technology officer of networking firm Interoute, who expressed dismay at the Chancellor's lack of tech chat today.

"Last year we were inspired with the promise of incentives to support UK tech investment, and a vow to make the UK tech centre of Europe. But George Osborne was curiously quiet on this day," he said.

"In today's internet-focussed world, surely there's no doubt that encouraging our technology industry is absolutely key to economic growth and success? The UK has the ideas, energy and innovation to make the UK a world leading technology centre, but it needs the right support and investment."

Some members of the tech industry have hit out at the Chancellor's failure to use the Budget to adequately address the UK's ongoing IT skills shortage.

Mark Wilkinson, managing director of software vendor SAS UK and Ireland, claims an IT skills push around big data, for example, could create 58,000 jobs and contribute around 216 million towards the economy.

"Demand is outstripping supply as the UK faces a major skills gap, particularly around STEM skills," he said.

"If the UK is to achieve the growth [big] data can deliver, it's time to abandon the current wing and prayer' attitude to skills [and] focus on investment in a joined up way."

However, there was a glimmer of hope on the horizon with this one, as Osborne gave his backing to the findings of a recent review - led by entrepreneur Doug Richard - of the Government's apprenticeship reforms.

"I fully endorse the report of Doug Richard...as the reform of apprenticeships is probably the single most important policy we're pursuing," he added.

Caroline Donnelly is the news and analysis editor of IT Pro and its sister site Cloud Pro, and covers general news, as well as the storage, security, public sector, cloud and Microsoft beats. Caroline has been a member of the IT Pro/Cloud Pro team since March 2012, and has previously worked as a reporter at several B2B publications, including UK channel magazine CRN, and as features writer for local weekly newspaper, The Slough and Windsor Observer. She studied Medical Biochemistry at the University of Leicester and completed a Postgraduate Diploma in Magazine Journalism at PMA Training in 2006.