TIGA, the network for games developers and digital publishers and the trade association representing the video games industry, has commented on the Government’s proposals to help small businesses outlined in the 2020 Budget.
TIGA have highlighted the relevant announcements from the Budget below:
- Digital Connectivity – The government is committing £5 billion to support the rollout of gigabit-capable broadband in the most difficult to reach 20% of the country. The Budget has announced the next seven areas that have successfully bid for funding from the third wave of the Local Full Fibre Networks Challenge Fund: North of Tyne (£12 million), South Wales (£12 million), Tay Cities (£6.7 million), Pembrokeshire (£4 million), Plymouth (£3 million), Essex and Hertfordshire (£2.1 million) and East Riding of Yorkshire (£1 million). The budget confirms that DCMS will shortly publish a consultation response which will confirm the government’s intention to legislate to ensure that new build homes are built with gigabit-capable broadband. The Budget has also announced that the Shared Rural Network agreement has been finalised between the government and industry. The government will commit up to £510 million of funding, which will be more than matched by industry, meaning that 95% of the UK’s landmass will have high quality 4G mobile coverage by 2025.
- Skills – The government will provide £1.5 billion over 5 years (£1.8 billion inclusive of indicative Barnett consequential)[1] in capital investment to ensure that all further education college estates are in good condition. This is designed to ensure that colleges have cutting-edge facilities to train people for jobs in the industries. The government has announced a commitment to a new £2.5 billion (£3 billion inclusive of indicative Barnett consequential) National Skills Fund to improve the technical skills of adults across the country. The Government will consult in the spring on how to target this fund most effectively.
- Apprenticeship Levy – The government will look at how to improve the working of the Apprenticeship Levy, to support large and small employers in meeting the long-term skills needs of the economy. In the meantime, the government will ensure that sufficient funding is made available in 2020-21 to support an increase in the number of new high-quality apprenticeships in small- and medium-sized businesses.
- Facilities and equipment to support T levels – The government will provide £95 million for providers in England to invest in high quality facilities and industry-standard equipment to support the rollout of T levels. Funding will support T level routes being delivered from autumn 2021, including construction, digital and health and science.
- Start-Up Loans – The government will extend the funding of the British Business Bank’s Start-Up Loans programme to the end of 2021-22, supporting up to 10,000 further entrepreneurs across the UK to access finance to start a business. The government will set out plans to expand the programme at the CSR.
- Open finance for SMEs – In order to realise the vision for truly open finance[2], HM Treasury will convene a summit with those at the cutting edge of industry innovation to establish what further data needs to be opened up.
- Increasing the Employment Allowance – The government will increase the Employment Allowance from £3,000 to £4,000 from April 2020. This is designed to benefit around 510,000 businesses by reducing their costs of employment, with an average gain of £850 per year. The increase will take around 65,000 businesses out of paying NICs entirely and means the government will have doubled the value of the Employment Allowance in four years.
- Enhanced local business support – The government will invest £10 million to increase Growth Hub capacity and provide a high-quality, core business advice and guidance offer across all 38 Growth Hubs.
- Access to growth capital for innovative businesses – Since the 2017 Patient Capital Review, the government has announced support for innovative businesses seeking access to long-term growth capital. To build on this, the Budget will provide the British Business Bank with the resources to make up to £200 million of additional investment in UK venture capital and growth finance in 2020-21.
- Start-Up Loans – The government will extend the funding of the British Business Bank’s Start-Up Loans programme to the end of 2021-22, supporting up to 10,000 further entrepreneurs across the UK to access finance to start a business. The government will set out plans to expand the programme at the CSR.
- SME productivity – Industry-led initiatives have a valuable role in supporting small businesses to improve their productivity. The government will invest up to an additional £5 million in Be the Business to expand its national productivity campaign and further develop its digital tools and resources.
- Competition – The government will accept all six of the Furman Review’s strategic recommendations for unlocking competition in digital markets. The government will launch the Reforming Regulation Initiative to invite ideas from business and the public for regulatory reform. Boosting regulators’ capacity is also essential to unlock the potential of emerging technologies and help businesses to develop innovative products and services, and the Budget announces that the government will invest £10 million in a second round of the Regulators’ Pioneer Fund.
- Trade – To strengthen the global ties of the digital technology sector, DIT and DCMS will pilot a Digital Trade Network in the Asia Pacific region, helping innovative UK companies to access opportunities in major new markets. DIT will establish local champions based at key overseas posts to support exporters from the Northern Powerhouse, Midlands Engine, and Western Gateway, and will increase the number of international trade advisers outside London. The government will support the UK’s world-leading fintech sector, along with the wider digital economy. The Budget announces a review of the UK fintech sector led by Ron Kalifa OBE to support growth and competitiveness in the sector. In addition, the government will convene a summit looking at what further data needs to be made accessible to make it faster and easier for SMEs to shop around for credit.
- Research and Innovation – The Budget plans to increase public R&D investment to £22 billion per year by 2024-25, which will take direct support for R&D to 0.8% of GDP and placing the UK among the top quarter of OECD nations – ahead of the USA, Japan, France and China. This is designed to back business to invest and innovate so that they can compete in the global technology-driven economy. The Budget will also invest over £900 million to ensure UK businesses are leading the way in high-potential technologies.
- World-leading research – The Budget will provide an immediate funding boost of up to £400 million in 2020-21 for world-leading research, infrastructure and equipment. This will help build excellence in research institutes and universities right across the UK, particularly in basic research and physical sciences. The government will also provide £300 million for experimental mathematical research to attract the very best global talent over the next five years. This will double funding for new PhDs and boost the number of maths fellowships and research projects.
- VAT on e-publications – The government will introduce legislation to apply a zero rate of VAT to e-publications from 1 December 2020, to make it clear that e-books, e-newspapers, e-magazines and academic e-journals there are entitled to the same VAT treatment as their physical counterparts.
The Chancellor also pledged £640 billion of gross capital investment for infrastructure including roads, railways, communications, schools, hospitals and power networks across the UK by 2024-25.
Dr Richard Wilson OBE, Chief Executive Officer of TIGA, said:
“Approximately 95 per cent of video games companies are small and micro businesses and there are a number of measures in the Budget that will be helpful to them.
“It is also great to see measures being introduced to improve digital connectivity across the country, and to train the current and emerging workforce in digital skills.
“The Government’s increased investment in infrastructure and R&D are also positive developments which could help to improve the UK’s productivity performance.
“We will continue to campaign for the introduction of a Games Investment Fund, which would provide pound for pound matched funding, up to a maximum of £500,000, for original game projects. The Games Investment Fund would also provide a commercial mentoring business advisory service, staffed by industry veterans, for games companies that access its grants or loans.
“TIGA will also continue its campaigns to champion Video Games Tax Relief and to ensure that the video games industry has easy access to recruit the best and brightest talent from the EU, EEA and beyond. As an industry that competes on a global level, we need access to the very best global talent.”
Notes for editors
Key fiscal projections:
| Percentage change on a year earlier, unless otherwise stated | ||||||
| Outturn | Forecast | |||||
| Year | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 |
| GDP growth | 1.4 | 1.1 | 1.8 | 1.5 | 1.3 | 1.4 |
| Outturn | Forecast | ||||||
| Year | 2018-19 | 2019-20 | 2020-21 | 2021-22 | 2022-23 | 2023-24 | 2024-25 |
| Public sector net borrowing (£ billion) | 38.4 | 47.4 | 54.8 | 66.7 | 61.5 | 60.2 | 57.9 |
| Public sector net borrowing (percentage of GDP) | 1.8 | 2.1 | 2.4 | 2.8 | 2.5 | 2.4 | 2.2 |
| Public sector net debt (percentage of GDP) | 80.6 | 79.5 | 77.4 | 75.0 | 75.4 | 75.6 | 75.2 |
[1] The Barnett formula calculates the annual change in the block grant that the devolved administrations in Scotland, Wales and Northern Ireland receive from the UK Government. These grant funds most of the devolved administrations’ spending.
[2] Open Finance is a concept that would allow financial institutions to share data about their client and allow clients to see their financial products in one place.