UK Tech Companies Request Tax Breaks

A group of British tech companies are calling on the government to encourage the growth of the IT industry through tax breaks

British technology companies are calling on the government to cut taxes and provide economic incentives to encourage the growth of the IT industry and create 250,000 jobs over the next ten years.

A group of companies, including Alchemy, Iris and Kewill, have drawn up a Technology Manifesto, in which they argue that the UK’s technology sector could help to drive national economic growth, as the manufacturing and banking industries falter in the face of recession.

Software and technology are needed

“It is now widely recognised that we need to rebalance the UK economy,” the director general of the IT trade body Intellect, John Higgins, told the Financial Times. “Rightly, there’s a rush towards engineering and manufacturing. But software and technology are also going to be at the heart of growth in the 21st century.”

He went on the ask “Why, when the UK has world-class science, managers, software engineers and international tech companies working here, there are too few UK tech companies in the FTSE 250?”

The 20-page manifesto, due to be published this week, identifies several key areas where the industry can capitalise on its potential and accelerate growth within the sector. These include entrepreneurship, academic connection with industry, a consistent framework for growth and prosperity, and delivery of the digital infrastructure.

In particular, it asks the government to provide financial help for science, technology, engineering and maths graduates, and requests that large technology companies share their expertise with emerging entrepreneurs in the sector. This would involve extending the research and development tax credits currently provided for small companies to all enterprises.

Foreign tech companies would be given incentives to invest in labs and service centres in the UK, in order to create more high-tech jobs, while UK technology companies would be encouraged to expand abroad.

The news follows the launch of the Tories’ Technology Manifesto last week, when shadow cabinet office minister, Francis Maude announced the party’s plans to make the UK “the most technology-friendly government in the world”. However, Stephen Timms – the minister in charge of delivering the government’s Digital Britain manifesto – derided the plans, describing the Conservatives’ broadband policy as “hopeless”.

The Tory manifesto outlined plans introduce a new ‘Right to Government Data,’ enabling the public to request – and receive – government datasets. This, the opposition party claimed, would make government more accountable and root out wasteful spending, as well as boost new business and application innovation.

Taxpayers face bill for railed systems

Earlier this year, the damning cost to the taxpayer of Labour’s computer blunders was revealed, after The Independent newspaper found that British taxpayers were left saddled with a bill of more than £26 billion for computer systems that had either suffered severe delays, or run over budget, or that had been cancelled altogether.

The Tory manifesto also called for the creation of a small IT development team in government to develop low-cost IT applications in-house and advise on the procurement of large projects. “For too long we have endured a closed shop government,” said Maude. “It is incredibly important that we get our economy moving again to get us out of Gordon Brown’s recession.”

In December last year business secretary Lord Mandelson admitted that the government could be doing more to turn out a generation of skilled engineers and technical staff. “We have been good at creating graduates in my view but slightly less good at the turning out the technician class that move to a higher class of qualification,” he said. “It has been a weakness, a gap in my view in Britain.”

He went on to say that the government was planning to fill the gap in the number of highly qualified engineers and technical workers in the UK over the next two years.

Last week also saw the publication of the e-skills Manifesto, which takes the gender imbalance into account alongside its emphasis on breaking down the digital divide and enabling an inclusive information society as part of the need to drive sustainable economic recovery and accelerate employment growth. It found that misconceptions about IT careers were limiting the recruitment pool, adding that “only 17 percent of technology professionals are female”.

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