Budget Looks To Green Power, But IT Mostly Ignored

In the last budget speech of this Labour Government before the general election, the Chancellor Alistair Darling has promised more investments in green technology, as well a number of other investment funds. But the budget mostly bypassed the IT and tech sector, barring the odd exception.

“This budget takes place as the UK economy emerges from the deepest global recession in 60 years,” Darling told Parliament. “We had to decide whether to stand on the sidelines or to intervene. The record shows that the right calls were made.”

However he warned that the recovery is still delicate. “It has been a testing time,” Darling admitted. “Our economy is at a crossroads, and confidence has not fully returned either for businesses or consumers.”

Darling admitted that the UK economy had retracted by 6 percent during the recession, compared to 4 percent in the US, and outlined a number of measures to support small companies and manufacturers, including a cut business rate tax for 12 months for small to medium businesses.

Government Spending

Darling however admitted that he had previously got his growing forecasts wrong and has revised his growth forecast downwards to 3 and 3.5 percent in 2011.

The budget also provided grim reading on public sector borrowing, but attempted to take the edge off the stark figures when he revealed that instead of borrowing £178 billion, the government will now only borrow £167 billion – £11 billion less than previously planned – whilst borrowing for 2010-11 will be £163 billion.

Darling is to stagger the 3 percent fuel duty increase, and smokers and drinkers will also feel the pinch of higher tax duties, especially cider drinkers.

Economic Growth

“A stronger economy will make the recovery easier,” said Darling, “but our competitors are not standing still and we can’t take growth for granted. The government has a crucial role to provide investment in key infrastructures.”

He promised a modest spending increase in roads as well as the national high speed rail link, but IT and technology in general got very little attention. He outlined a new national investment corporation, UK Finance for Growth, which will streamline and improve government help to small and medium-sized enterprises, overseeing £4 billion of support for business.

Darling also promised that 15 percent of all government contracts will to go to small firms. This comes after Labour was accused of saddling British taxpayers with a bill of more than £26 billion for computer systems that have either suffered severe delays, or run over budget, or that have been cancelled altogether.

IT and Tech

As previously mentioned there was little mention of the IT and tech sector in the budget, although the Chancellor did promise help to the computer games sector, in a similar way to the aid given the British film industry.

“The UK has the potential to be a world leader in the digital economy,” said Darling, “and access to high speed broadband is vital to that.” He then briefly mentioned the government’s broadband tax as a way to ensure that both urban and rural areas will allow 90 percent of the country to gain access to fibre networks.

However, as Sebastien Lahtinen, co-founder of thinkbroadband.com points out, this is a step back from Gordon Brown’s promise of universal broadband by 2020. “”The Prime Minister made references in a speech on Monday to 100 percent next generation broadband coverage, so we are disappointed that the budget has simply repeated the government’s previous target of 90 percent coverage by 2017,” he said.