A taxing challenge to industry success
The IT sector is the second most productive in the entire UK economy, worth a massive £66.5bn last year.
And its contribution of 6.4 per cent of GDP is less than a single per cent behind the financial services industry, that much-vaunted success of all economic successes.
As such, the efforts of UKTI the government’s trade and investment arm to develop an
effective
marketing strategy for our technology firms’ expansion into foreign
markets and for inward investment
into the UK sector are to be supported and
applauded.
The only slight reservation of otherwise unqualified approval is that the
Treasury appears to be humming
a different tune altogether. And humming it
rather louder.
Sir Digby Jones, former head of the Confederation of British Industry and now minister for trade and investment, is right when he says that the IT sector is an unsung hero of innovation and success.
And he is right that we should be proud, brave and optimistic in our continued pursuit of a world-leading commercial position.
In addition, he is right that any strategy to promote the UK IT sector has to focus as much on small businesses as on their larger counterparts, because so much of the industry is composed of niche firms and innovative startups.
But that is where things come unstuck.
UKTI can promote away until it is blue in the face. But if the chancellor’s proposal to remove taper relief on capital gains tax goes ahead, small businesses will be the worst hit and innovators will be encouraged to take their ideas abroad.
Sir Digby said he has put his position on the issue (unspecified) to Alistair Darling and we must wait for the official statement to the Commons, due before Christmas.
We must all hope that good sense prevails, or UKTI’s prescient, constructive and intelligent strategy could be suffocated at birth.
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