The Autumn Statement has left some tech sector figures encouraged, others disappointed. The Scottish Government’s official statement said that it lacked clarity, and that wavering policies will make it difficult for their coming budgetary plans. 

Chancellor Jeremy Hunt’s speech formally announced that the UK is in a recession, leaving the public and businesses concerned as the cost of living crisis continues. 

Though vaguely, the chancellor did directly address the tech sector during his speech.

“I want to combine our technology and science brilliance with our formidable financial services to turn Britain into the world’s next Silicon Valley,” he stated.

The chancellor added that the UK “needs to be better at turning world class innovation into world class companies.”

While Hunt did not explicitly lay out how to achieve this goal, he did make several plans in different areas that will dramatically influence the UK tech sector. 

Regulatory Changes

Hunt re-affirmed the government’s plans to change regulations for digital services – we already have hints of a plan to replace several aspects of EU legislation, including GDPR. 

In order to encourage competition, the Government plans to enhance the powers of the Digital Markets Unit in order to reign in monopolies. 

Hunt insisted that the government intends to listen to the wants and needs of business by lifting important tariffs on goods for UK firms. This, he added, will allow them to improve output.

Energy Investment

In addition, the chancellor called for a combination of energy independence and energy efficiency to alleviate effects of global crises and to better prepare the UK for the climate crisis. 

Noting the continuation of the new plant at Sizewell, Hunt claimed to affirm the Conservative government’s commitment to clean energy and their COP26 promises. 

By 2030, the UK should have reduced energy consumption from buildings and broader industry by 15%, according to Hunt. 

To achieve this, the government is investing £6.6 billion in energy efficiency, with a further £6bn to be invested in 2025.

“Our commitment to the British people is, over time, to remove this single biggest driver of inflation and volatility facing British businesses and consumers,” Hunt said, citing energy as this driver. 

Digital Transformation 

Project Gigabit was briefly mentioned as part of the infrastructure initiative to improve digital connectivity across the UK. This will be targeted, as Hunt said, at Britain’s most rural and remote areas. 

Plans for Levelling Up the UK will continue, and the secretary will work with local authorities, focusing on changing approaches to investment zones, and leveraging research strengths to create clusters for growing industries. 

£600bn is to be invested over the next five years into infrastructure, which includes broadband, as well as railways, roads, and cleaner energy. 

Research and Development

Hunt noted the expectation that R&D spending would face cuts, but public funding will increase to £20bn by 2024-5. 

The government also published their decision on Solvency II, which Hunt claims will unlock billions of pounds by reducing the capital insurers need, allowing more funding to theoretically be given to research and development. 

Autumn Statement: What Does the Tech Sector Think?

Labour’s Rachel Reeve lambasted the statement  as a “vanity project” in her response, and some of the tech sector also appear wary of some of Hunt’s bold hopes.

Though they welcome the intention of bolstering the UK’s tech sector, the government’s goal “will be underpinned by employer’s ability to access and develop skills,” Matt Weston, Senior Managing Director for the UK and Ireland at Robert Half said. 

“The UK needs a sustainable talent pipeline,” Weston added, “and unless there is action to bolster skills domestically and enable international talent to work in the country, the UK’s tech standing is at considerable risk.”

Similarly, while Malcom Seagrave, Chief Growth Officer at xDesign found the infrastructure investments promising, he suggested it won’t be enough to achieve the dream.

“At xDesign we know that people and skills are the real key to unlocking growth in the sector and the Government must be doing everything it can to support training and upskilling for the sector,” Seagrave said. 

However, not everyone sees turning the UK into the next Silicon Valley as an unattainable goal. 

Dr. Henry Balani, Head of Industry and Regulatory Affairs at Encompass Corporation, commented that it was possible if the right steps were taken.

“Many businesses will need to overhaul internal infrastructures, which will mean equipping themselves with state-of-the-art cloud technology and tools powered by automation, to drive success now and in the future.”

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The changes to EU regulations were also encouraging to Dr. Balani, who commented: “This approach should allow the UK to refine regulations so that they more appropriately address its unique market requirements, and simultaneously support innovation without hindering the financial landscape.”

David Ovens, Joint Managing Director of Archangels, was also encouraged.

He said: “Positive support from the Chancellor includes a commitment to look at how regulation could change to better support safe and fast introduction of new emerging technologies, protection of the government’s R&D budget and the retention of investment zones.”

Vishal Chopra, Partner and Head of Tax for Scotland, KPMG said: “Attention now turns to Holyrood and the Scottish budget in December. If today’s measures are anything to go by, we can expect further tax increases in Scotland as the Government prepares to tackle the recession and choppy waters ahead.”

The Scottish Government seemed troubled by the Autumn Statement: “The constant U-turns on tax by the UK Government have made planning for the Scottish Budget more challenging this year.” 

The unsuredness of budgets in Scotland spurred by the “mismanagement” of the economy may put infrastructure plans in jeopardy, especially for Levelling Up which relies heavily on collaboration with smaller local governments. 

ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., claimed the statement would usher in an ‘Austerity Christmas’ as increased taxes would tighten shoppers budgets. 

While ParcelHero acknowledged the planned business relief, Jinks commented  “the ongoing business rates revelation plans confirm that this outmoded and extremely costly tax will continue to strangle High Street businesses once any relief is withdrawn.”  

The tech sector appears to have been warily encouraged by the Autumn Statement. Hunt’s comments, while important to address, were in the middle of a speech that reminded the public that relief for energy bills would soon end, that there are no proposed solutions to staff shortages in the NHS as nurses vote to strike, and that taxes are rising.