“Fast growing UK companies are trading elsewhere, but we obviously benefit from inward investment,” he told City A.M., as new figures revealed the UK’s digital technology economy grew three times faster than the rest of the economy.
“Those tech companies recognise we are putting in place appropriate tax arrangements in place and they come here for a whole host of reasons such as skills, creativity and access to European markets.”
The tax debate has engulfed Google and the government after the tech giant was revealed to have paid just £130m in back taxes. Senior executives from Google and HMRC are due to be grilled in front of MPs about the deal today.
The new figures published today reveal the digital economy is outperforming the rest of the economy when it comes to job creation, turnover and productivity.
Jobs grew by 11 per cent between 2011 and 2014 with the digital tech industry now employing 1.56m people across the country. They were found to be almost twice as productive as those working elsewhere, according to the Tech Nation report from Tech City UK and Nesta.
Commenting on the figures, Prime Minister David Cameron said: “This government will continue to back, with all levers at our disposal, the innovation, creativity and entrepreneurship that is redefining and strengthening the modern British economy."
The report found that two in five digital tech economy jobs are in traditionally non-digital industries, while turnover in digital businesses was 32 per cent higher than the national average between 2010 and 2014 when it hit £161bn.
"Tech Nation 2016’s findings will prove invaluable to industry, international investors and digital businesses themselves, acting as a detailed topography of the UK’s digital economy and signposting where future opportunities lie," said Tech City UK chief Gerard Grech.