Spring Budget 2023: What does this mean for the tech sector?

Jeremy Hunt presented the spring budget for 2023 and proposed a plan to stimulate innovation and attract investment in the UK technology sector. The Chancellor accepted the recommendations of Sir Patrick Vallance’s review of innovative digital regulation published today with Spring Budget. The chancellor also announced twelve new investment zones in the north of England, Scotland, Wales and Northern Ireland; £900m to improve the UK AI sector with an AI sandbox. But what does all this really mean? We interviewed experts from the British tech sector.

Ann Boden, founder and CEO of Starling Bank: “London’s success as a fintech hub should allow it to spread love – wealth and jobs – across the UK, including in Greater Manchester and Wales, where there is a large pool of tech talent. We are pleased to see the chancellor recognize this in his 12 new investment zones.”

“Everyone deserves a second, third or fourth chance in life. We already use the return form at Starling and have found that it helps us grow a diverse and inclusive team, while still offering support to those returning to work after an extended break. Everyone wins. We welcome the new over 50 scheme introduced in this budget.”

“Allowing companies to write off the full cost of eligible machinery and equipment, including IT equipment, will give businesses a significant incentive to invest and help create more jobs.”

Reacting to the Chancellor’s tech and innovation strategy, Alice DiCaprio, chief economist at R3 and former chair of the FinTech Committee at the US Department of Commerce, comments:

“If London wants to maintain its status as a global financial services hub, then technology must be at the center of its strategy. Westminster has made welcome progress in creating a proper financial services environment for technology-led innovation such as digital pound advice and crypto asset regulatory proposals, but it is vital that the government maintain momentum and ensure the right policies ensure a leading position in the global marketplace. conditions.

“We look forward to learning more about Treasury support for other fintech initiatives such as the FMI sandbox and the Fast Track Working Group to ensure the UK remains at the forefront of financial services innovation. With increasing competition in Europe and elsewhere, the use of transformative tools specifically designed to empower financial services, such as distributed ledger technology, is rapidly becoming a central pillar of economic growth.”

Mike Randall, CEO of Simply Asset Finance, says: “Rising across the country will play a vital role in the growth of the UK economy. Since our company’s inception, we’ve seen business investment struggle to sustain growth over the past few years, with small firms often having a lot of trouble finding vital funding. We welcome the Chancellor’s announcement of 12 new investment zones across the UK which we hope will create profitable and competitive business opportunities in business centers outside the capital.”

Jamie Anderson, Chief Revenue Officer, Emburse: “Continuing energy support schemes is the least the government can do, but it is still not enough when it comes to protecting the 78% of young people experiencing increased living costs, many of whom are becoming increasingly isolated in an attempt to make ends meet with ends. With more than 8 million households affected by fuel poverty this year, the situation offers very little for those already living below the poverty line.

“Public finances are still volatile and businesses need to keep their finger on the pulse when it comes to taking valuable care of employees. The latest Emburse study found that nearly half of young workers want a company-paid card to pay for their expenses due to the high cost of living. Management must listen and implement meaningful policies that change the lives of workers.

“Giving corporate cards to employees also makes sense given the rise in fraud and businesses could face millions of pounds of employee spending that should not be reimbursed due to poor cost management. As businesses continue to grapple with this economic whirlpool, internal errors cannot be overlooked, which is why it is more important than ever for financial groups to gain access to information about large expenses in order to predict the future and minimize wasteful spending. Management must assess and clearly communicate internal policies to ensure that funds are appropriately allocated, the needs of the business are best served and that their employees are protected.”

Pat Phelan, UK Managing Director and Chief Account Officer of GoCardless, said: “The spring budget introduced some welcome measures for consumers and promising tactics to revitalize the economy, from ‘returns’ to investment zones. But we haven’t heard much about the huge growth lever the chancellor clearly believes in after his efforts this weekend: our “world’s best” tech sector. To maintain our leadership, we must seize every opportunity to create the right environment for British technology to flourish. There is much to be done, but there are two opportunities to act right now. First, it advances the changes announced last year to improve the Seed Enterprise Investment Scheme. Secondly, we need to keep the pace of open banking, which is at a critical stage in its development and is currently used by more than seven million people.”

Lily Megson, policy director at My Pension Expert, said: “Jeremy Hunt’s reopening budget statement came with a few surprises. The predicted policy to get people back to work was there. However, consumers still reeling from the soaring cost of living likely wanted to hear the chancellor lay out his plans to improve the economy, especially his target audience over 50.

“As a historically undervalued demographic but with a lot of untapped talent, Hunt was right to reach out to people over 50 to address economic inactivity. In today’s environment, retirement plans need to be flexible, and midlife skills training and MOTs will allow people to adjust to an ever-changing work environment.

“Likewise, the abolition of the lifetime benefit is conspicuous, but it only affects the richest people. Indeed, during the year leading up to April 2020, only 42,350 people broke the norm.

Comments by Joseph Kalnan, Corporate Currencies Manager at Moneycorp: “The failure of the Treasury to extend the Electricity Bill Assistance Scheme (EBRS) is a disappointing turn of events for SMEs. We already knew from the FSB that more than 350,000 small and medium-sized businesses had to downsize, restructure or close entirely if their electricity bills returned to higher rates in April. But hot on the heels of a new wave of uncertainty from the collapse of SVB, which shook the foundations of the UK SME ecosystem, the impact will be felt even more acutely.

“The concomitant increase in corporate tax and today’s budget becomes even more disappointing. Business insolvency has already reached levels not seen since the financial crisis of 2008, and the situation could get worse if current conditions persist. We saw from the quick intervention over the weekend that the Treasury was willing and able to protect UK plc, but today it appears to have regressed in that regard.”

Gerard Grech, CEO of Tech Nation, comments on the spring budget: “Today’s budget is a positive indication of the UK government’s ambition to become a science and technology superpower. We applaud measures to support the UK tech industry, including the introduction of additional tax support for R&D, as well as the announcement of an artificial intelligence sandbox and ambitious investments in quantum technologies that will attract investment in new industries while protecting consumers and businesses.

As a country uniquely positioned between two economic powerhouses, the US and the EU, we must use innovative regulation to enable us to become an international hub and leader in AI, quantum computing, and deep technologies. This is an important step towards building a unique, value-driven tech ecosystem in the UK that sets us apart from other tech hubs.

We must build on the momentum created and continue to develop a culture of innovation and collaboration that allows businesses to grow and succeed.

The recent government and private sector intervention to sell Silicon Valley Bank is a prime example of what can be achieved through private-public collaboration and a clear vision.”