Announcing the budget today, the Chancellor of the Exchequer Phillip Hammond highlighted changes to the levels of National Insurance paid by the self-employed. From April 2018, Class 4 national insurance contributions for the self-employed will rise from 9% to 10% – and then to 11% in April 2019 – on income up to the higher rate threshold of £45,000. The move is likely to affect workers in the so-called ‘gig-economy’ working for tech companies such as Uber and Deliveroo. Prior to the budget, the Institute for Fiscal Studies called the lower NI contributions paid by the self-employed “costly, inefficient and unfair”. There was additional opposition across the board, with many considering conditions for these workers precariousness enough. Shadow Minister for Industrial Strategy and Labour MP Chi Onwurah tweeted “So Tories encourage/force 100,000s into self-employed through cuts, deregulation, lack of ‘gig’ economy regulation – then raise taxes on them!” Green Party co-leader and MP Caroline Lucas said the move risked “increasing insecurity” for gig economy workers.

All budget funding announcements directly relating to technology, science and engineering came from the National Productivity Investment Fund, which was established in last year’s Autumn Statement. The £23 billion fund seeks to provide high-value investment, prioritising critical areas for improving national productivity, including economic infrastructure, housing and R&D.
The Chancellor announced £16 million of funding for a new 5G mobile technology hub. This forms part of the government’s wider 5G Strategy, published today, which paves the UK’s new approach to next generation mobile technology. The hub will be rolled out as part of a new National 5G Innovation Network, overseen by a new centre of 5G expertise within government, which will trial and demonstrate 5G applications.

The strategy also includes the government’s response to the National Infrastructure Commission’s Connected Future Report which will include developing commercial options for improving coverage on roads and rail, as well as working with Ofcom to map out the UK’s regulatory environment for 5G. On Twitter, the Institution for Engineering and Technology (IET) called the investment “welcome” but said “focus on coverage and regulatory change is vital”.

Hammond also announced £200 million for local projects to leverage private sector investment in full-fibre broadband networks.

In practice this will unite local public sector customers to drive demand, thereby reducing the financial risk of building new full-fibre networks. Public sector buildings, such as schools and hospitals will also be directly connected to broadband networks, with the aim of bringing fibre closer to more homes and businesses. The government will also seek to open up public sector assets, such as existing ducts, to allow fibre to be laid more cheaply.

Finally, the funding boost will cover offering full-fibre broadband connection vouchers for businesses, to increase take-up of services where new networks are built through the programme.
In last year’s Autumn Statement, the chancellor announced that £4.7 billion from the Northern Powerhouse Investment Fund would go towards R&D. Today’s budget represented the first lot of investment from that pot.

The Chancellor announced £270 million for an ‘Industrial Strategy Challenge Fund’ to kick-start the development of new technologies within the UK. The first set of challenges will seek to encourage the development of next-generation batteries for electric vehicles, enable the development of cutting-edge artificial intelligence and robotics systems and accelerate patient access to new drugs and treatments. In a move designed to further support investment, changes to the Research and Development Expenditure Credit were also announced, with the intention of increasing the certainty and simplicity around claims, also taking action to improve awareness of R&D tax credits among SMEs.

The reaction from industry body Tech UK was particularly enthusiastic. Charlotte Holloway, Policy Director welcomed the funding for R&D and broadband networks stating that “the £270m new commitment to developments in areas such as biotech, robotics and driverless cars is welcome. Similarly, the £16m for a 5G hub and £200m for local authorities […] should be applauded.”
Elsewhere, underlining the importance of STEM to the UK economy and the government’s Industrial Strategy, £90 million was set aside in the budget for 1,000 PhD places in areas aligned with the strategy, with around 85% in STEM subjects. £160 million was dedicated to supporting new fellowships for early and mid-career researchers in areas aligned to the Industrial Strategy, while £100 million was pledged for attracting global talent in the science and research sectors over the next four years. Despite these announcements, Jamie Kerr, Head of Tech and Entrepreneurship Policy at the Institute of Directors said that “a question mark still hovers over the skills pipeline in the short-term.”

However, CBI Director-General Carolyn Fairbairn shared a more positive view, calling the budget a “breakthrough budget for skills”, stating that, “there has never been a more important time for the UK to sit at the global top table of technical education for young people”.

Authored by Neil Thomas