What Does the 2013 Budget Mean for Tech, Science and Booze?

By Chris Mills on at

Blah blah deficit debt cuts reform monetary policy gah. Words. Very important words though -- our new Twitter-friend George's budget determines what the government spends and where for the next year. That has a huge impact on technology, science, and almost everything we care about.

So, the budget is in, and overall it's positive for the technology sector. We've laid out the changes to current government policy blow-by-blow.

 

Aerospace

The first, and most significant announcement is to do with the aerospace technology industry. Thanks to the likes of Rolls-Royce, Airbus and BAE Systems, the UK has the second-largest aerospace industry in the world, worth around £19 billion a year, with a good 125,000 employees on the payroll.

The government has announced £2.1 billion in R&D funding (with the government and industry each contributing half of the cash) over the next seven years, working out to around £300 million a year. Considering that the industry as a whole only spends £2.5 billion per year on R&D, that's a fair chunk of change, which should help companies compete with American behemoths like Boeing and Lockheed Martin.

To distribute the dosh, the government is setting up the painfully-bureaucratic-sounding Aerospace Technology Institute, which will divvy up all the cash between the companies, like sweeties between grovelling toddlers.

 

Visual Effects

If there's something politicians love more than their hard-earned expenses, it's buzzwords like 'creative', 'digital' and 'technology'. To get the full quota of bullshit bingo into the Budget, the government has announced support for small businesses that do CGI and the like, because apparently the UK is a "global centre of excellence" in that. (Jargon buster: when the stats show that the UK isn't a 'leader' in an industry, we become a 'global centre of excellence' instead because that sounds almost as grand whilst needing zero facts to back it up.)

The support takes three parts:

- £15 million investment in "digital content production", to be distributed by means of a competition run by the Technology Strategy Board -- small businesses (or 'SMEs' in acronym-speak) can compete for funding. I envisage this as some kind of Dragon's Den, where CGI companies come begging for money from a more multicultural version of the Dragons.

-  £8 million funding for "support skills development in the UK digital content sectors". This is just an increase in the existing Skills Investment Fund, which basically tries to provide a talent pool for the movie industry.

- "Public consultation on options to provide further support for the visual effects industry through the tax system".  This is window dressing because someone's told the government that three points sound better than two, and he'd run out of money by this point.

 

Spectrum Release

We've already had the 4G spectrum auction, and that netted a fair bit of dough (although not quite as much as it'd hoped) for the hard-strapped government, so it's looking to sell off more. Specifically, the government is looking to get rid of 500MHz of government-held spectrum in total by 2020. To do this, it's looking at introducting "financial incentives" to make public spectrum use -- mostly spectrum used by the likes of emergency services and railways -- more efficient, so it can flog other bits.

Hopefully, down the road, that should mean more spectrum available for TV broadcast and mobile networks. Given that there's likely future demand from mobile devices and hopefully some kinda 4K video broadcast service, this is a win-win for everyone.

 

Booze

- Pre-Budget rumours spoke of a terrible thing: an extra tax on drinking in pubs. Thankfully, the government's decided not to crap all over that particular pleasure just yet -- not only is there no rise in 'beer tax', but there's actually a 2 per cent cut in beer tax (that's just beer, not other drinks) this year, which should reduce the price of a pint by 1p.

More helpfully, the 'beer escalator' -- a gradual increase in the amount of tax on beer, similar to the 'fuel escalator' on petrol -- has been scrapped, with future rises in tax pegged to inflation.

All in all, it's a good Budget for the technology sector, but not so much for the average tech-savvy consumer. The funding for aerospace and movies is good from a business, economic, and national pride point of view, but fairly irrelevant for the average punter. The one pre-budget rumour that we got really excited about -- funding for Wi-Fi and cellular access on trains -- has sadly failed to materialise. Still, stiff upper lip and all that.