Budget garners muted response from IT industry

Most IT industry and trade bodies gave Chancellor Alistair Darling's budget proposals a cautious welcome that, in terms of technology, drew more attention to what wasn't announced than what was.

Green issues were given some attention, with proposed legislation to charge for plastic bags, greener fleet vehicle tax incentives and a deferral of this year's fuel tax levy increase, but many experts observed that the budget did little to encourage businesses to adopt green initiatives and reduce their carbon footprint.

David Elwen, director at IT consultancy, DMW said: "It is disappointing that there was a lack of measures targeted specifically at the IT industry, including support for reducing the amount of equipment in data centres and increasing their energy efficiency. Running IT in businesses can account for 70 per cent of the average IT director's budget."

Phil McCabe, spokesman for the Forum of Private Business agreed that tax incentives did not go far enough. He told IT PRO: "We were perhaps looking for extended capital allowances for IT equipment procurement, but those announced only pertained to green vehicles."

Stephen Robertson, British Retail Consortium director general said the budget failed to offer significant incentives that could make a real difference to the environment and to the economy. "The Chancellor has also done nothing to reduce VAT [value added tax] on energy efficient products," he added.

On a more positive note, ntl:Telewest Business' head of strategy, George Wareing suggested the telecommunications sector would benefit from government pressure to cut fleet emissions, through moves to update travel-heavy operating models. "52 per cent of UK adults indicate that they considered home working to have a positive impact on the environment," he added.

Vehicles were also targeted in more technology-dependent measures announced to tackle carbon emissions. Tom Foulkes, director general of the Institution of Civil Engineers (ICE), commented on new timetables announced for road pricing schemes: "We welcome the announcement of road pricing and the development and testing of the technology for road pricing programmes. ICE has been working with its partners to ensure that road pricing technology is robust - we will share our findings with the government."

Deborah Nazareth, spokesperson for IT industry body Intellect, urged the government to continue consultation with the industry over road pricing technology options. "Road pricing technology is going to change and develop and government needs to make sure its policy keeps pace with that change," she said.

David Brown, chief executive of the Institution of Chemical Engineers welcomed the fuel duty rise deferral, but observed that simply taxing motorists is the wrong way to combat carbon emissions. He added: "The Chancellor gave some positive signals about bringing new technology to the market; chemical engineers look forward to improved funding for R&D [research and development] into new vehicle technologies and fuels, such as hydrogen and second-generation biofuels that don't displace food crops, but we believe that additional measures may be needed to stimulate demand for innovative products and services."

The other glaring omission in Darling's budget, as far as the UK IT industry was concerned, was in the area of skills. The British Plastics Federation stated: "We welcome the £10 million towards improved science teaching to increase the number of young people studying science, however the sum of money pledged is not very high."

Intellect's Nazareth told IT PRO: "Although science funding was increased, there was nothing in there about encouraging technology as a subject." And Nick Dusic, director of the Campaign for Science and Engineering added: "The Chancellor highlighted the UK's history of scientific invention as central to the UK's success in the global economy.

"It is critical that tomorrow's innovation white paper puts investing in science and engineering at the heart of the government's new innovation agenda. The UK needs to redouble its efforts to produce highly skilled graduates and cutting-edge research."

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