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Spring Statement 2019 allocates £200m to technology

Chancellor Philip Hammond's latest statement announces funding to support progress in areas including supercomputer development, photonics and bioinformatics, promises tighter digital regulation and attempts to ensure flow of skilled professionals into the UK

At this year’s Spring Statement, chancellor Phillip Hammond has announced £200m in funding for science and technology projects, as well as attempts to tighten digital regulation and tackle concerns over high-level skills shortages.

The investments underpin the government’s ambition to raise economy-wide investment in research and development (R&D) to 2.4% of GDP by 2027 and include an allocation of £81m in a national photonics centre.

Some £45m will go towards a “critical upgrade” to data storage cloud computing infrastructure at the European Bioinformatics Institute in Cambridgeshire, to enable researchers using big data to drive genetic research.

In technology funding, £79m has been committed to replacing the UK’s current high-performance computing facility Archer with new supercomputer, Archer 2. Based at Edinburgh University, the platform is expected to provide researchers with a fivefold increase in computing capacity. Up to £60m has also been set aside for the Joint European Torus (JET) nuclear-fusion experiment.

Separately, the chancellor announced that £53m has been allocated to the third wave of funding for local fibre networks spread across nine areas nationwide.

With Brexit leaving “a cloud of uncertainty” over the foreseeable future, Hammond stressed the government is taking action to ensure the UK remains attractive for technology professionals, with PhD-level roles becoming exempt from visa caps.

Immigration rules will also be updated for 180-day absences so that researchers conducting fieldwork overseas will not be penalised if they apply to settle in the UK. This, Hammond said, is part of an effort to maintain the openness of the economy and attract the skills the country needs, “no matter where they come from”.

The chancellor added that the digital economy presents opportunities and challenges and that large businesses must “pay their fair share”, adding that a consultation on the detailed design and implementation of the Digital Services Tax will be effective from 1 April.

The need for an overhaul in digital regulations was mentioned, as well as the recommendations set out in the Furman report on digital competitiveness, released 13 March.

While specific details on how and which parts of the report will be taken into account were not mentioned during the Spring Statement, the chancellor mentioned he has asked the Competition and Markets Authority (CMA) to carry out a review into the digital advertising market.

Over the coming months, the government will also publish its approach to “putting the UK at the forefront of mobility”. The idea is to set out how the country will respond to changes taking place in transport technology in areas such self-driving vehicles and advances in data and internet connectivity.

On the chancellor’s announcements around digital regulation, TechUK’s deputy chief executive Anthony Walker raised concerns that the government could be creating the impression that technology is “something that needs to be tackled rather than championed”.

“At a time when digital firms and investors already face huge uncertainties due to Brexit, pressing ahead with a raft of new, untested and unilateral measures, like the Digital Services Tax, risks undermining confidence,” said Walker.

“The government will need to work hard over the coming months to show that it can strike the right balance if it wants to be regarded as the best regulated digital economy in the world.”

On the review by the CMA into digital advertising market, TechUK warned that any intervention must be “carefully thought through and targeted”, and implied that the CMA is not sufficiently skilled to carry out such a review:

“[The digital advertising review] will require staff who truly understand the complexities of the adtech market and the role these platforms play in the wider digital ecosystem,” said Walker.

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