The UK’s thriving tech sector has hailed Rishi Sunak’s spending plans in the Budget today, saying the chancellor was “backing tech in a big way”.
Announcing the Budget this afternoon, Sunak unveiled a raft of new measures aimed at boosting both startups and established tech firms.
“This government should be applauded for committing heavily to digital innovation as a route to the economic recovery and supporting jobs,” said Russ Shaw, founder of Tech London Advocates & Global Tech Advocates.
“The tech sector will welcome the majority of the chancellor’s spending commitments in what will be a step change for our digital businesses as we emerge from this crisis.”
Julian David, chief executive of Tech UK, said: “Today’s Budget is a significant intervention from the chancellor that not only includes further support for sectors hard hit by the impact of Covid-19 but also addresses the urgent need to drive business investment which will be critical for rebuilding the UK economy in the aftermath of Covid-19.”
The government unveiled visa reforms designed to attract top talent, including a new unsponsored points-based visa for science, research and tech workers, as well as an expansion of the existing visa programme for scale-ups and entrepreneurs.
Seema Farazi, UK and financial services immigration leader at EY, said the government had taken a “decisive and affirmative step forward to position the UK as a leading hub for tech and fintech”.
“A tailored visa route into UK scale-ups will have far-reaching positive implications and will support the tech sector as it looks out to the global marketplace.”
Rafa Plantier, head of UK and Ireland at open banking platform Tink, said: “The new visa presents a golden opportunity for the UK to continue to trailblaze in fintech — encouraging entrepreneurialism, investment and growth.
“Doing this will ensure UK tech companies have access to the global market opportunities they deserve to foster innovation and to keep making waves in the fintech industry.”
Sunak also confirmed the launch of a new £375m fund that will see the government invest in fast-growing UK tech startups.
The Future Fund Breakthrough will offer grants to R&D-heavy firms aiming to raise up to £20m, with taxpayer money matched by private sector investment.
Michael Niddam, managing partner at Kamet Ventures, said: “We’re delighted to see the government continuing to back the UK’s sharpest entrepreneurs and invest in our thriving tech ecosystem with its announcement of the new Future Fund: Breakthrough.”
But he warned there was “huge pressure” on the government to choose the startups with the most growth potential.
Simon Arlington, partner at global tech-focused law firm Morrison & Foerster, also warned that the fund may not prevent British tech firms from selling out to the US or Asia.
“With cash-rich foreign investors looking to capitalise on a devalued pound, government investment is unlikely to deter founders from selling their businesses to entities in the US or Asia if the deal is right,” he said.
Other tech support
The chancellor’s Budget also included a raft of other measures that have been welcomed by British tech firms.
The new Help to Grow scheme, aimed at supporting smaller businesses, includes free digital skills training a 50 per cent government contribution towards productivity software up to £5,000.
The government will also launch a review of R&D tax reliefs and changes to the enterprise management incentive (EMI) share option scheme for small businesses.
Listing reforms outlined in a landmark government report calling for an easing of various share restrictions, including allowing Spacs to float in London, have also been hailed as a significant potential boost for the tech sector.
Dom Hallas, executive director of The Coalition for a Digital Economy (Coadec), said the chancellor had “put tech at the core of his plan for growth”.
“From consultations on reforms to the R&D tax credit, EMI share options scheme and pension fund rules to allow more investment in venture capital — to two new visas, incentives for SMEs to spend money on software and a new Future Fund. There’s plenty in this budget for the startup ecosystem to be pleased with.”
London Tech Advocates’ Shaw added: “Listings reform will pave the way for a bumper year of tech IPOs and spur innovation and growth in a sector that has massive potential to define this country’s future economy.
“As the City prepares for a year of high-profile floats, we now have a compelling set of proposals which will ensure British scale-ups remain in the UK to pioneer innovation, create jobs and generate growth.”