Budget 2020 in tech: UK.gov splashes cash on broadband and R&D while trying to limit impact of COVID-19 outbreak

The UK government has announced a multibillion-pound package of measures designed to boost investment in computing, digital services and science. In his 2020 Budget, freshly appointed Chancellor of the Exchequer Rishi Sunak said that £5bn would go towards getting gigabit broadband in the most difficult-to-reach 20 per cent of …

[mark l 2]

"Other measures introduced in the budget include cutting the tax on e-publications from 1 December 2020, making e-books, e-newspapers, e-magazines and academic e-journals entitled to the same VAT treatment as paper-based media."

Where as some may see this as levelling the playing field between paper books and e-books, I see this as just another boost to Amazon's making their prices 20% less on the Kindle store and a kick in the teeth for high street based book shops who are already struggling against Amazon.

[Giles C]

They will probably lower the prices a bit and pocket the difference, someone has to pay for the accounting software changes

[jonathan keith]

Let [category] {VAT rate} = 0

Invoice sent separately.

[Cederic]

None of the high street based book shops are willing to take the risk on printing and stocking any of my books. So I sell on Amazon instead.

Electronic sales are higher than paper, and I'll get an extra 13% of the price paid by the consumer. Works for me.

[John Brown (no body)]

"None of the high street based book shops are willing to take the risk on printing and stocking any of my books."

Isn't that the bit publishers normally do, not the retailers?

[Zebo-the-Fat]

A lot of talk about money being promised.... nothing being said about how we will pay for it

[e^iπ+1=0]

nothing being said about how we will pay for it

My guess would be increased levels of government debt, such as bonds.

[IGotOut]

Pay increases (compulsory such as minimum wage and voluntary such as wages over this), with no income tax threshold will bring in some.

2% tax on e-commerce should bring in a fair chunk.

Infrastructure building can bring in a good amount (it worked for the US during the depression), but yes I can see more borrowing.

[Anonymous Coward]

Borrowing

At 0.1% interest rates, why not!

[Tom 7]

Re: Borrowing

Like low interest rates have had the economy booming in the last ten years!

[PapaD]

Re: Borrowing

Booming, no - but it has headed off the mass foreclosures and vast numbers of people losing their homes

Like the last time we had a major recession and the BoE interest rate headed into the high teens. (70's i think, bit before my time, but i hear things)

[Russell Chapman Esq.]

Borrowing from yourself

As long as a country borrows in its own currency from its own central bank, the level of debt is not important, as long as inflation doesn't go up too much. There are no indications that inflation will be a problem given the current global economic situation. The UK government can essentially borrow from the central bank for free. That debt can also be canceled by the central bank after it has served its purpose. If you own the currency, you need never be in debt to yourself.

[anonymous boring coward]

Re: Borrowing from yourself

So we had a money tree all along?

Guess May was wrong then.

[Doctor Syntax]

Re: Borrowing from yourself

No there isn't a money tree. It's just Brownomics - make the future pay for now by loading it with debt.

[Doctor Syntax]

Re: Borrowing from yourself

"a country borrows in its own currency from its own central ban ... as long as inflation doesn't go up too much"

"Borrowing" money from the central bank and cancelling the debt afterwards is printing money. Inflation is the consequence.

Of course we could just print a teeny bit so there isn't "too much" inflation. But now prices have gone up a bit so we have to print a teeny bit more so government can cover increaed costs and .... why is inflation out of control?

[Anonymous Coward]

It's fine because it's a Conservative government and 'everyone knows they'll be fiscally responsible'.

Of course, when the Labour party espouse the very same ideas...

[1752]

FTTP

"£5bn would go towards getting gigabit broadband in the most difficult-to-reach 20 per cent of the country"

Wondering what percentage has gigabit available FTTP (thinking less than 10%). Or does the small print mean gigiabit to the cabinet?

[Tom 7]

Re: FTTP

Smallprint? Do you think this is worked out in any detail?

And just a reminder that BT could have done 2.4Gb fibre to the premises for hardware costs of less than £100 30 years ago.

[codejunky]

And

There is also that victory for those protesters who marched to London demanding an end to the tampon tax! The VAT on such sanitary products to be removed in January as we wont be in the EU and so will have the sovereignty to manage our own tax affairs!

[phuzz]

"Number 10 advisor Dominic Cummings"

Can we refer to him as "Mandelson Mk2"?

Mainly because I think it would annoy both of them.

[Cuddles]

R&D

"R&D in science and technology was another focus of the government's efforts to boost the economy. It said the aim was to increase investment to £22bn per year by 2024-25, which would put the UK ahead of the USA, Japan, France and China in terms of investment as a proportion of GDP.

The government is set to provide £400m in 2020-21 for research, infrastructure and equipment targeted at research institutes and universities across the UK, particularly in basic research and physical sciences."

In other words, and as noted elsewhere, there will be a pitiful amount actually put towards R&D, likely not even offsetting the large cuts seen over the last decade or so. Meanwhile £20 billion or so will somehow be spent trying to persuade the private sector to spend their own money on doing actual R&D. The BBC was eager to note that the promised amounts would result in the UK beating the target of 2.4% of GDP being spent on R&D... but only if industry more than matches the amount the government promises, and only if you also count the money spent on persuading them to do so as R&D spending in itself.

[Doctor Syntax]

"academic e-journals entitled to the same VAT treatment as paper-based media."

So the end-user prices will stay the same because the publishers have worked out what the market will bear and the publishers will pocket the difference.