What's in the UK's Budget 2016? A 5G strategy, a big data centre for the ONS and driverless cars

Chancellor George Osborne's Budget speech barely mentioned the vital role of the technology sector, but the document does commit to a 5G strategy, relaxing regulations for connected cars, a 'big-data hub' for the ONS and amendments to planning laws so taller mobile masts can be built.


The Budget for 2016 committed the UK to delivering a 5G strategy next year and delivering a ‘big data hub’ for the Office for National Statistics, as well as plans to relax regulation surrounding connected cars.

However, apart from these initiatives, Chancellor George Osborne’s speech today was rather light on the technology sector.

Image: David Cameron and George Osborne in the 'Northern Powerhouse' / Flickr / HMRC
Image: David Cameron and George Osborne in the 'Northern Powerhouse' / Flickr / HMRC

The government will deliver a 5G strategy in 2017 based on an assessment from the National Infrastructure Commission. 

This assessment will explore how the UK can become a “world leader” in 5G deployment and how it can “take early advantage of the potential benefits of 5G services”, including a case study based in the South West. A network planning tool will be on trial in Bournemouth.

Osborne mentioned the Broadband Investment Fund – first revealed in November 2015 – an effort to support the growth of alternative broadband networks. And the ultrafast broadband grant will distribute £14.5 million for coverage in the south west.

The budget also commits to provisions for “greater freedoms and flexibilities for the deployment of mobile infrastructure” – in other words, relaxed planning restrictions for telecoms networks, and allowing for taller masts for mobile coverage.

750MHz of public sector spectrum will also be released in bands under 10GHz by 2022, and 500MHz will be available by 2020.

The Office for National Statistics will receive more than £10 million from central government for a ‘big data hub’, to “maximise the public value of existing and new data sets using cutting-edge techniques”.

Commenting on the data hub, Julian David, CEO of technology trade body techUK said: “Investment of £10 million in a new hub for data science will help the public and private sector make better use of data, which has the potential to reduce cost and improve public services.”

Osborne also committed to conducting trials of driverless cars, with a consultation planned this summer to investigate relaxing regulation for autonomous vehicles on major roads in England.

A £15 million ‘connected corridor’ between London and Dover will also enable vehicles to interact with infrastructure and “potentially other vehicles”.

UK budget 2016: the implications for UK tech

ComputerworldUK editors discuss the implications of the budget.

UK budget 2016: reactions from the tech sector

Nissan Europe chairman Paul Wilcox welcomed the plans.

“These will support the development and growth of autonomous vehicle technology in the UK,” Wilcox said.

There are questions surrounding the 5G commitment when there are still wider connectivity problems across the country – including in the ‘Northern Powerhouse’, which Osborne made frequent reference to as part of an effort to “rebalance our country”.

The ‘Northern Powerhouse’ is a drive to promote the north of the country as a central area for business. Like the rest of the country it still suffers from ‘not-spots’ – where access to enterprise-grade Wi-Fi is lacking, and particularly in rural areas.

Michael Gould is the CTO of cloud platform business Anaplan, which is based in the region. According to Gould, broadband speeds within the major cities are generally good, but “if you have people working from home in the more rural parts of the north, this can prove to be a challenge”.

“The roll out of high-quality rural broadband is a nationwide issue, but it is crucial to the development of the Northern Powerhouse,” Gould said.

And CIO of IT services company Getronics, Tim Patrick-Smith, said he was “surprised at the general lack of focus on the UK’s technology sector”.

“It’s disappointing to see a lack of commitment to resolving the issue many areas of the UK remain poorly served, in terms of communications and connectivity services,” he said. “These are the lifeblood of a modern economy.”

Otherwise, there was not a great deal specifically related to technology.

There’s only one mention of ‘big data’ and zero for the ‘internet of things’ in the entire document. By contrast, last year’s budget talked up driverless cars, IoT, the fintech sector, and digital currencies, to name a few. 

Predictably, SMEs, startups and enterprises in the technology sector are likely to applaud the round of tax cuts for businesses.

And individuals who sell through the digital economy using services like eBay and Airbnb are likely to welcome a tax break to 'micro-entrepreneurs', who will not have to pay tax on their first £1,000 of earnings.

CA Technologies’ CTO in the UK, Martin Ashall, even suggested that tax breaks for businesses could help plug the skills gap: “We believe the government’s pledge for lower taxes on businesses and enterprises will help create more jobs,” he said.

“The tech industry should be particularly pleased – with the skills gap still a major obstacle in realising the full potential of the British technology sector, the new tax breaks will certainly help.”

See also: The big UK tax quiz! How much UK tax do Apple, Amazon, Uber and more pay?

Alex Macpherson, head of fund management business Octopus Ventures, said Osborne’s announcements will be great news for high-growth small businesses – like SwiftKey, which was in Octopus Venture’s portfolio.

“We are witnessing exciting developments in the UK's entrepreneurial market and it's great to see this Government recognising this,” Macpherson said.

In his response, leader of the opposition Jeremy Corbyn criticised the Chancellor for a massive cut to science spending, and the loss of jobs in the renewables sector, solar in particular.

Both Osborne and Corbyn made reference to big business avoiding paying their tax in the UK, and although no names were named, it's quite possible both were referring to Silicon Valley giants like Facebook and Google.

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