Home » What could the 2024 Spring Budget mean for Tech?

What could the 2024 Spring Budget mean for Tech?

by Simon Jones Tech Reporter
27th Feb 24 10:20 am

The UK budgets of late strike a balance between broad (and bold) policy visions for the future, and fiscal policies linked to spending, investments plans and taxation.

The budget is now used as another opportunity for political posturing, providing a platform for the incumbent government to lay down their vision and generate mass public appeal.

Rhys Merrett, Head of Technology, at The PHA Group offered his insight into what this budget is likely to mean for the private sector and the country’s community of tech firms.

“With the Conservative Government at a real risk of losing the next election by a significant margin, the upcoming Spring Budget takes on added significance. Interest rates are hovering above 5% and inflation is above the Bank of England’s target of 2%. Add to the fact the economy has officially slipped into a recession, and the outlook for the private sector and tech companies proves even more challenging,” Merrett said.

“To win trust and conjure support, we can expect there to be bold policy visions from the Government to level-up the UK, make the country a global powerhouse for innovation and productivity, and make the economy internationally competitive. All sounds great in principle. The question is how to deliver in light of the financial pressures facing businesses at the moment.”

Speaking about the actual reforms we are likely to see, there has already been some indication of what could be expected.

“The reality, it seems, is that there is still a long road ahead before the UK can bounce back. Public debt needs to be addressed, with proposed tax cuts being touted as the instigator to boost growth.

“However, there is a need for any cuts to be guided by tax reform rather than a quick solution approach. From a tech perspective, the Secretary of State for Science, Innovation and Technology, Michelle Donelan has already outlined her vision to make the UK a technology and science superpower. This has been backed by a commitment to spend £20 billion over the next financial year on R&D,” Merrett commented.

“One issue has been the UK’s ability to support the lifecycle of a scaling tech startup, from its initial founding through to its scale-up and eventual exit through a listing.

“The London Stock Exchange has been facing significant challenges recently with companies instead listing on the New York Stock Exchange due to the liquidity benefits.

“As part of a response, Secretary Donelan has announced a focus on increasing funding liquidity for high-growth science and technology companies, while helping companies grow and eventually go public on the LSE. These are positive steps in the right direction, though require a consistent, long-term reform. Herein lies the predicament facing the Government, and indeed, the private sector.”

Offering his final thoughts, Rhys said the significance of the Budget should not be downplayed.

“With polls showing that Labour is on track to win the next election, how likely is it that the announcements from the Spring Budget will be enacted? There is no telling given Labour has their own economic vision for the country.

“It means that for businesses, the post-Budget period is not likely to provide any further clarity, with all eyes on the general election. Regardless of the outcome, clarity is needed so that organisations can plan for the future knowing what policies will be in place for the next few years.

“This does not undermine the importance of the Spring Budget. It is one of the Government’s last attempts to make its case to the UK business and tech community for its economic plan for the country.”

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