What does the general election victory of Boris Johnson and the Conservatives mean for the technology sector? Silicon UK takes a quick look
Prime minister Boris Johnson has secured an overall majority in the House of Parliament, after a stunning general election victory on Thursday.
The Conservative Party gained their biggest majority since the 1980s thanks to strong performances in traditional Labour strongholds, amid a decline in the Labour vote.
But what does five years of Boris Johnson mean for the technology industry? In this piece we will examine the past tech record of the Prime Minister, and highlight the areas that will likely be impacted by the victory.
The first issue that the tech industry is likely to see is the UK implementing some form of digital (tech) tax on big name technology firms such as Facebook, Amazon and Google.
Ever since the budget of October 2018, the UK has planned to push ahead with its own national levies on tech giants.
Although the UK had yet to set a date for this, the Conservative Party had committed to implementing a digital service tax on the revenue of companies if it wins this month’s national election.
Under the plan, tech companies that generate at least 500 million pounds a year in global revenue will pay a levy of 2 percent of the money they make from UK users from April 2020.
It is worth noting that in July this year before he became prime minister, Boris Johnson backed a digital tax when he said that the government had to find a way to tax technology giants on their income.
The Prime Minister earlier this month again pledged to press ahead with the implementation of a tech or digital tax on large Internet firms, despite the scowling presence of US President Donald Trump who has attacked France’s digital tax scheme.
Huawei and 5G
Earlier this month at the NATO gathering in the US, where President Trump once again highlighted the alleged security risks associated with Huawei equipment, and the Prime Minister soon made a surprising intervention.
Prime Minister Boris Johnson suggested that Huawei may still be excluded from UK 5G networks, when he said that its inclusion could “prejudice” the Five Eyes intelligence relationship.
The five eyes relationship sees the United States, UK, Australia, Canada and New Zealand share intelligence information between them.
It should be noted that three of the UK’s largest wireless providers (EE, Vodafone, and Three) are all using Huawei to build their 5G networks.
The only exception to this is O2, which has instead opted to use 5G equipment from Ericsson and Nokia.
So if the Prime Minister opts to ban completely the Chinese firm, it will require Huawei equipment to be retroactively removed from the 5G networks built so far by Vodafone, EE, and Three.
Boris Johnson has also been outspoken about the need for the UK to accelerate the deployment of superfast fibre broadband across the UK, after he called for the technology to be made available to “every home in the land” within five years.
Prior to that, the government had set a goal of 2033 for the rollout of fibre to all premises, a target Johnson had previously called “laughably unambitious”.
“If we want to unite our country and our society, we should commit now to delivering full fibre to every home in the land not in the mid 2030s – but in five years at the outside,” Johnson had previously written in the Telegraph. “Let’s say goodbye to the UK’s manana approach to broadband and unleash full fibre for all by 2025.”
That five year deadline caused questions in the telecom sector about how the government hopes to achieve this, but there may be relief in some quarters that the Labour Party did not win power.
This is because Jeremy Corbyn and the Labour Party had pledged to nationalise BT’s fixed-line network – a policy that Johnson called a ‘crackpot’ idea.
TechUK said that Labour’s plans would be a ‘disaster’.
In 2015 for example he launched the £5m London Enterprise Panel (LEP) scheme, which aimed to help young Londoners looking to learn digital skills.
Indeed skills remain a key focus even more, in light of Brexit.
In the Conservative party manifesto for the 2019 general election, the Tories committed to supporting international collaboration, and ensuring UK teams can recruit the skills and talent they need from abroad.
The Conservatives also pledged to continue to collaborate internationally – and with the EU – on scientific research.
Accessing much needed skills and collaboration with European partners, are seen as vital with the looming issue of Brexit on the horizon.
“To build a successful global tech firm, you need smart, creative people and you need capital,” explained Stan Boland, CEO of self-driving software company FiveAI.
Boland believes these issues are essential to the future success of the UK’s tech sector, and is pleased that they are high on the agenda of the incoming Tory government:
“The UK has flourished as Europe’s biggest tech hub because it has both, along with world-class universities, top talent, and one of the world’s most supportive tax and regulatory environments,” said Boland.
“It’s vital that the Conservative government preserves what’s good about the UK tech sector, and helps to make it great,” he added. “We encourage our political leaders to support an open and well-funded sector that can foster the iconic global tech companies of the future.”
The last possible item that could be on Boris Johnson’s radar is the issue of drones.
When he was major of London in 2014, Johnson called for airborne drones to take the place of road vehicles.
He called on the capital’s technology firms, particularly the financial technology sector, to come up with a solution to the traffic problems that plague the city, and suggested drones could be the answer.
“We have a problem, folks – all this internet shopping is leading to a massive increase in white van traffic dropping this stuff off – 45 percent it’s going to go up in London in the next seven years,” he said at the time. “That’s going to be terrible for congestion in our city…”
“I look out at this brilliant audience here today, bulging with ideas, and I ask you possibly to solve it,” he said. “We need a solution … Is it, as I hope, going to be drones? I want to be controlling an app that enables my shopping not only to be click and collect … I want my own personal drone to come and drop it wherever I choose.”
So that concludes Silicon UK’s quick look at the technology sectors that are likely to see some changes as a result of the thumping victory for Prime Minister Boris Johnson and the Conservative Party.
What areas do you think will be impacted? Comment below.