Chancellor George Osborne has delivered a Budget with a few major concessions that should benefit the IT industry and other key sectors of the economy.
Changes include an increase in support for apprenticeships as well as several forms of business tax relief – including slashing corporation tax from 28 percent to 23 percent.
Additionally, boosts to Enterprise Zones and increases in lending to small businesses could provide some benefit to innovation in the industry.
As warnings continued of a bleak outlook with continued inflation, with economic growth revised downwards, the Chancellor offered some support to IT by promising the creation of thousands of apprenticeships across skilled industries.
Some 50,000 more apprenticeships will be created over the next two years, alongside 100,000 places on a new work experience scheme. Of the new apprenticeships, it is understood that some 8,000 will include skilled professions –likely referring to IT, science, engineering and advance manufacturing.
There will also be the creation of 24 new university technical colleges.
As the first Technology and Innovation Centre is created, another £100 million will be spent on new science facilities including the Space Innovation Centre.
The current rate of corporate tax at 28 percent will be cut in stages to 23 percent by the end of the parliament (with a two percent cut this year), potentially providing some relief for technology companies.
The Chancellor targeted the growth of new businesses, promising to create 21 new enterprise zones. The areas will receive up to a 100 percent discount on corporate rates and on super fast broadband. Areas include Birmingham, Solihull, Leeds, Sheffield and London.
There will also be a 15 percent increase in the availability of credit to small businesses, following an agreement with the banks, as the Chancellor promised to make the UK the “best place to start a business”.
But government departments will face renewed pressure to cut their costs – including IT and the back office – with the promised creation of a “star chamber” that departmental heads could be called in front of if they fail to meet mandated cuts.
HM Revenue & Customs may continue to face the task of merging its National Insurance and income tax systems, as a consultation is launched on the idea.
Elsewhere in the Budget, the personal annual income tax allowance will rise by £630 a year to £8,105 by 2012. Additionally, a one pence per litre cut to fuel tax was announced, plus a scheme to assist first time house buyers.
The Chancellor branded the Budget “an urgent call for action for Britain”. But with growth prospects down, Labour leader Ed Miliband said of Tory cuts in last year’s Spending Review: “It’s hurting but it isn’t working.”