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Budget 2011: What can we expect?

Before the big event tomorrow, Jennifer Scott takes a look at the speculation around what this year’s Budget will bring.

Jennifer Scott

COMMENT: Tomorrow will see George Osborne take to the lectern in the House of Commons to deliver his first Spring Budget since becoming Chancellor of the Exchequer, and since his party came into power albeit as part of a Lib Dem/Tory coalition.

All of the substantial announcements are locked away from the press until Osborne takes the stand but he, and his department, have dropped enough hints and let out enough leaks that we have a grasp of what we are set to face tomorrow.

So, what will be in the 2011 Budget affecting the technology industry and UK business as a whole? Here is what we know so far.

The main push will seem to be for what the Tories are calling "enterprise zones." It is a concept the Chancellor has let slip countless times whilst both he and the Prime Minister shout about how the Budget will be "unashamedly pro-enterprise."

The first idea behind enterprise zones will be to lower tax on businesses to help them survive through the tough economic period. It also aims to encourage more start-ups, quashing fears that high taxes will be taking up all their profits.

Obviously, lower taxes would be great for companies of all sizes, taking the pressure off where many have struggled over the past two years. But of course, the cash will have to be made up somewhere else. So whilst businesses as a whole will benefit, individual employees, from CEO to junior members, will be likely to pay more personally.

The second part of the enterprise zone is to lower regulations, again encouraging more start-ups whilst "cutting the red tape" many organisations get bogged down in.

In some ways this could be great. The hoops of regulation many must jump through can stifle businesses and discourage investors from other countries coming and adding to the economy.

However, what has worried me in particular is the regulations that SMBs could become exempt from. Yes, I am entirely for encouraging smaller companies to get off the ground, but one of the rules being mentioned for the scrap heap is maternity and paternity laws for the smallest of businesses.

Although an expense, it is a key right for workers in this country, hence being a law. We hear of enough horror stories of people discriminating against women when hiring because they are worried they will go straight off on maternity leave. Scrapping it altogether might save a few quid, but could put off some real talent from the workforce applying for jobs at companies needing the skills to get off the ground.

A more positive move, yet to be confirmed but heavily hinted at, is a large investment into creating more apprenticeships and work placements.

With the increase of student fees and an aging population, the UK needs more than ever to create more opportunities for the young to find gainful employment.

Technology is a particular area where the upcoming workforce needs to be encouraged by the Government. Recent research into the IT sector showed job vacancies going up. However, so was the average age of employees, whilst those interested in the subject fell. Job placements and apprenticeships could be a great way to bring people in.

There might also be good news for the business traveller, if the rumours prove to be true.

The proposed 1p fuel duty rise set for April is rumoured to be scrapped. This might bring many a cheer and be a crowd pleaser but, be warned, it will also cost the treasury 1.5 billion, according to the Institute of Fiscal Studies.

There is also talks of binning the inflation linked air passenger duty on flight, so again, regular flyers will see more money back in their corporate budgets rather than expensed out.

As we said, none of this is certain yet but we will know much more when Osborne starts his speech at 12:30pm on Wednesday. IT PRO will be live blogging the Budget as well as tweeting and bringing you all the news, views and analysis throughout the day.

For our live blog, click here.

For our Twitter, feed click here.

For our news round-up, click here.

Let's see what the Budget 2011 brings for the UK technology industry...

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