Chancellor's report: IT makes its demands

Chancellor of the Exchequer Gordon Brown is preparing to deliver his pre-budget report, at a time when both the global economy...

Chancellor of the Exchequer Gordon Brown is preparing to deliver his pre-budget report, at a time when both the global economy and the IT industry are struggling for growth.

The IT industry is hoping for significant financial incentives and the cutting back of red tape.

Mark Thackeray, SAP partner manager at business services group Xansa, told CW360.com that economic stimulation was key.

"My biggest fear is recession," said Thackeray. "The Government should allocate more resources for businesses to stop them going under. Rather than make people redundant, businesses should be given tax incentives to keep people employed. What is the point of spending money to recruit people, then spending money to lay them off, then spending money to re-recruit them six months later?" he asked.

Ruth Lea, head of the policy unit at the Institute of Directors, explained that as the economy shrinks, organisations would increasingly feel the tax burden.

"Businesses are faced with deteriorating economic conditions, and the increased regulatory and tax burdens will inevitably become more difficult to bear," Lea said. "We urge the Chancellor to reduce these two burdens. Any such moves would be far more effective in encouraging enterprise than, for example, the extension of tax credits, helpful though they can be."

Tax breaks are important to the IT community, according to Roger Till, director of external affairs for e.centre, the e-business trade association. "I would like to see consistency with VAT on Internet sales and a series of tax breaks to encourage e-business," Till told CW360.com.

"SMEs should have tax concessions for purchasing PCs, installing broadband and training staff for e-business. All of these tax breaks would encourage e-business in smaller companies. Tax breaks should also be used to encourage SMEs to work with pathfinder local authorities and thus get business involved in e-government," he added.

Broadband is another issue close to the IT decision maker's heart. Ronan Miles, chairman of the Oracle User Group in the UK, hopes Gordon Brown will clarify the Government's broadband progress.

"What we want is broadband," Miles said. "The Government has a serious commitment to doing things in this area, but how far down the line it really is and how much it is going to do, I don't know."

David Harrington, director general of the Communications Management Association, also wants to see Gordon Brown address the broadband issue. "Tax credits for broadband suppliers and tax relief for those who take up the service are essential," he said. "If we get nothing else that will be a tremendous success. Go for it Chancellor!"

Margaret Smith, e-commerce director at Legal & General, wants to see such tax incentives applied to IT training, as well as special attention paid to technology security.

"I feel very strongly that the Government should be providing the infrastructure for e-passports; where e-passports, in conjunction with biometric technology, are used as a primary means of identification, not as a method for passing out personal payment details," Smith said.

However, Rupert Wheeler, member of the Elite committee - the British Computer Society's IT Forum - does not want to see specific IT-related items in the budget, because it could shift resources away from core business.

"What we want in fact is no change, so we don't have to programme for bureaucracy, but for productivity," said Wheeler. "This Chancellor seems to have got a reputation, certainly in the press, for meddling - and all this meddling means business has to change its systems and take its focus away from productivity programming."

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