Philip Salter, of The Entrepreneur’s Network, examines some of the biggest policy shifts of 2016 that will impact the UK tech community.
The biggest shock to UK policy makers and politicians of 2016 was the decision of 17,410,742 people – 51.89% of those that voted – to leave the European Union. While the government managed in 2016 to get away without explaining precisely (or even vaguely) what Brexit actually means, 2017 will be the year of the big reveal.
Whether they voted to stay or go, most entrepreneurs will want to maintain the freest possible movement of people, goods and capital with our trading partners across the Channel. Conservative vice-chair Mark Field MP’s aide got it about right on the government’s aspirations: “Have cake and eat it” (part of her handwritten note, which was photographed following a meeting headed by David Davis MP, Secretary of State for Exiting the European Union).
Those metaphorical cakes were presumably keeping free trade and ending free movement. If they manage to pull that off, the lead negotiators should be given the Victoria Cross. Although, thankfully, we aren’t at war, it surely deserves the definition “most conspicuous bravery, or some daring or pre-eminent act of valour or self-sacrifice, or extreme devotion to duty in the presence of the enemy”, which is what the Victoria Cross is awarded for. After all, I can think of no greater self-sacrifice – at our expense and to the gain of the rest of the world – if we do close the borders and cut net migration to that ill-fated “tens of thousands” promise.
Uber, but for workers
The Uber ruling is about a lot more than Uber. It’s about employment. The question is: how do we define workers? Currently, Uber drivers are self-employed, however the judgement by the Employment Tribunal is perhaps the first step to changing this. If the case gets through the Employment Appeal Tribunal, the Court of Appeal and the Supreme Court then we could see Uber drivers classified differently, and therefore entitled to the minimum wage and other benefits that workers get. Plus Uber would have to start paying Employer National Insurance Contributions (NICs) – something that the Treasury wouldn’t be averse to.
This lack of clarity is why the Prime Minister has initiated a review on modern employment. Ultimately, the government must weigh up the two sides. The knee-jerk conclusion would be to weigh in on the side of the worker – after all, Uber is a multibillion dollar company. But Uber drivers, by a margin of five to one, don’t want to be classified as workers because of the increased flexibility this affords. The average Uber driver earns £16 an hour (£12 after costs) – well above the national minimum wage.
Meet the HealthTech startups pitching at Elevator Pitch LIVE 2017
However, there are inconsistencies that the Treasury should look at. The self-employed pay less in NICs and don’t pay Employers’ NICs at all. This disparity is unfair and encourages bogus self-employment. But rather than ask the self-employed to pay more tax, we should remove Employers’ NICs entirely. This tax on jobs is more detrimental to the economy than other taxes – consumption taxes should be increased to offset the cost to the Treasury.
The Autumn Statement wasn’t exactly a barrel of laughs. It never is. Inventive entrepreneurs, dedicated technologists and anyone who had anything in world to preoccupy them could be forgiven for missing it. Chancellor Philip Hammond did the honourable thing and banned future Autumn Statements. This will decrease business uncertainty, which can only be a good thing.
But there were a few interesting announcements. It was confirmed that corporation tax – another one of those less good (or worse, if you prefer) taxes – would be cut to 17% by 2020. The Living Wage will increase to £7.50 in April 2017 and there were plenty of new spending commitments, including a National Productivity Investment Fund – £23bn over five years and an extra £2bn per year by 2020-21 – invested in research, development and innovation, infrastructure and housing.
There will also be £1bn investment in fibre networks and 5G across Britain and a £400m injection into venture capital funds, which aims to unlock £1bn of new finance “to prevent our fastest growing technology firms being snapped up by bigger companies, rather than growing to scale”.
GP Bullhound: UK tops ranking for European tech unicorns
On export finance, the government is planning to double its total risk appetite to £5bn, increasing its capacity for support in individual markets by up to 100% and upping the number of pre-approved local currencies from 10 to 40. If you haven’t got the memo yet: this government is desperate for business owners to export.
Perhaps the most surprising announcement was that by 2020, government spending on R&D will grow to an additional £2bn over and above existing spending. This represents an increase of around a fifth. Priority technologies will be targeted through an Industrial Strategy Challenge Fund (ISCF) for collaborative research between industry and academia. This is a victory for those who have been campaigning for the government to take a more active role in the economy. It’s a change of tack from the Conservative Party, leaving Osborne’s deficit promises in a worse state than his political career.
The Snooper’s Charter is kind of a big deal. It will take time before the surveillance state is properly up and running but, once it is, Britain will be a very different place. This is Theresa May’s legacy from her time at the Home Office, and the arguments for and against it are familiar: protection versus liberty.
The Snooper’s Charter allows police forces and intelligence services with a warrant to hack into your hardware, software, networks and servers. Security and intelligence agencies can also bulk hack foreigners. With a warrant, security services and police forces will also be able to access internet history, which must be stored for 12 months.
Meet the three PropTech startups pitching at Elevator Pitch LIVE 2017
Your view on the Snooper’s Charter will depend upon where you sit on the authoritarian–libertarian axis. But for those flirting with the former, you might be interested to know that 48 public authorities will have access to your internet connection records.
Unsurprisingly, these include the likes of the Secret Intelligence Service, GCHQ and the Ministry of Defence, but it also includes the Food Standards Agency, Health and Safety Executive and the Welsh Ambulance Services National Health Service Trust.
I can’t for the life of me work out how allowing the Food Standards Agency to see my internet history – or anyone else’s for that matter – is supposed to make us safer, but there you go. The government moves in mysterious ways.