Business And Technology Sectors React To Summer Budget 2015

Jul 10, 2015

Earlier this week, Chancellor George Osborne revealed the first all-Conservative budget in nearly ten years. Here is how members of the business and technology communities reacted.

Digital Services

James Norman, UK public sector CIO, EMC said:

“What came as a surprise was the lack of focus on delivering digital services and transformative change. The sheer growth in digital citizen services has been astounding, but government needs to accelerate its efforts to keep up with the expectations of the ‘information generation.’ The delivery of smarter and more convenient online services in areas like healthcare, local government and tax, need to be a priority. [The] announcement of the Next Generation Digital Economy Centres and schemes to bring together businesses, engineers and scientists to drive the commercialisation of technology will lay the groundwork but government needs to invest more to support the development of online and digital services.”

Neil Crockett, CEO at the Digital Catapult, said:

“The message from this Budget is clear and we are encouraged by the strong focus on productivity, as well as the continued emphasis on building the Northern Powerhouse and investment in the Digital Economy Centres. This initiatives are all aligned to the Digital Catapult’s current focus and activity.

“Since the last Budget we have opened three Digital Catapult Centres across the UK, in partnership with LEPS and Universities, with two of these based in the North. Having worked with our partners and local councils to create the Greater Manchester Data Synchronisation Programme, which unlocks value for local authorities, business and community alike, we are confident that devolving more power to the Greater Manchester area is a good move by Government.

“This, paired with the new round of enterprise zones across the country, will create greater opportunities for business, academia and public sector collaborate and grow. We look forward to working with the Digital Economy Centres to deliver maximum impacts for the UK.”


James Norman, UK public sector CIO, EMC said:

“[This week’s Budget from the UK’s Chancellor had a running theme of taking the necessary steps and a sensible path towards building a strong UK economy. A major step towards this was the extra £8bn per year funding for the NHS. We have long been supporters of the NHS, but what this lacks is a call for smarter use of technology and data-driven processes to drive the much needed efficiencies in a struggling government department. Our report outlined up to £66bn of savings opportunities per year, but this needs to come from being more focused on capturing and understanding data to deliver more personalised and preventative treatment, aided by technology.”


James Poyser, co-founder of inniAccounts said:

“As an employer and founder of a tech business that wants to grow, I really welcome the apprenticeship reform. It pains me to see ‘training’ firms punt young people and apprenticeships as cheap labour. We see them as a vital part of our lifeblood, the next generation that will move our businesses on. Investment in the scheme needs to be far if Britain is to genuinely bridge the tech skills gap and create loyal, high performing employees that can compete on a global scale and is especially important if we are to reach the ambition to create Britain’s own home-grown Google.”

Corporation Tax

Christian Mancier, Partner, Corporate and Commercial, of Gorvins said:

“The biggest business headline to come out of the Budget is the reduction in corporation tax to 19% in 2017 and 18% by 2020. A clear statement of intent that ‘Britain is open for Business’ with Britain having the lowest Corporation Tax rate of any G20 nation. In addition to making British business more competitive on the world stage, the new rates of Corporation Tax will further boost business confidence and it is business confidence that leads to a strong economy.

“However, a note of caution is that the benefit of a reduction of corporation tax (an output tax) needs to be weighed against any increases in input taxes associated with carrying on a business (such as the insurance premium tax rise to 9.5%, the introduction of the ‘National Living Wage’ etc.) and with any Budget ‘the devil is in the detail’ which invariably takes a little while to filter through.”

National Living Wage

Christian Mancier, Partner, Corporate and Commercial, of Gorvins said:

“The most controversial aspect from a business point of view is probably the introduction of the National Living Wage for those aged over 25 which will start at £7.20 per hour and rise to £9 per house by 2020. This will have the largest impact on the smallest of businesses and those businesses employing large numbers of staff who operate in the lower margin arena such as hospitality, retail, social care etc.

“Some businesses will take the new that they should be paying at least the National Living Wage anyway as a way of incentivising staff and promoting loyalty, however, this is difficult in those lower margin and less skilled sectors. Some have openly criticised the fact that young people aged under 25 are excluded from the National Living Wage going so far as to say this is ‘morally wrong.’

“Some help is available to the smallest of businesses in the form of a 50% increase to the National Insurance Employment Allowance which will help small business owners reduce their wage bill and possibly off-set this against the introduction of the National Living Wage. However some would prefer the decision on minimum wage to remain with the Low Pay Commission for fear of having to lay off staff if payroll costs go up.”


Christian Mancier, Partner, Corporate and Commercial, of Gorvins said:

“The change to the way dividends are taxed could impact on those smallest of businesses whose owners traditionally take their remuneration by a mix of salary and dividends. This has traditionally been for tax efficiency reasons and the Chancellor has no doubt tinkered with this system to try and level the playing field to the tax the business would have paid through PAYE/NIC had the business owner simply taken a salary instead of a mix of salary and dividends. This is a complex area and it will no doubt take the tax advisors a little while to get to grips with the changes which could involve a big change to the regime many business owners have become accustomed to.” 

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