Jeremy Hunt, the Chancellor of the Exchequer for the UK, delivered his Autumn Statement of 2023 on November the 22nd to Parliament. In this statement, he outlined the government’s five economic priorities for the upcoming forecast period. These include reducing debt, cutting taxes, supporting British businesses, building sustainable, domestic energy, and providing world-class education.
The Office for Budget Responsibility (OBR) predicts that the policies as outlined in the 2023 Autumn Statement will reduce inflation and increase business investment by £14 billion. Additionally, it is forecast that the Autumn Statement policies will increase the UK economy’s potential output by 0.3%.
This statement also includes a plan for an enormous investment in tech, particularly Artificial Intelligence (AI).
Here is a quick run-down of some of the major commitments made in the Autumn Statement.
Lowering Debt
In this year’s statement, the Chancellor of the Exchequer has reaffirmed the commitments made in the 2022 Autumn Statement to provide £14.1 billion for the NHS and adult social care. £2 billion will also be made available for schools up until 2025.
According to the written statement, “tackling waste and inefficiency has always been at the heart of the government’s approach to public spending.” However, inflation continues to add pressure to departmental spending. Regardless, Parliament hopes to raise an additional £5 billion in tax revenue to fund these necessary public services.
Cutting Taxes
Following the economic downturn resulting from the COVID-19 pandemic and the war in Ukraine, the Autumn Statement focuses on the ways in which the economy can and will grow. Since inflation is falling, the government vows to return tax money to hard-working citizens.
Significantly, taxes will be cut for over 29 million working people. For Class 1 employees, the National Insurance contributions (NICs) will be reduced from 12% to 10% beginning January 2024. By reducing taxes, the government hopes to get more people into the workforce and to bolster the labour market.
The Autumn Statement also outlines some other measures to improve economic conditions like increasing the National Living Wage (NLW) to £11.44 and to support various welfare systems for the ill, disabled, and unemployed.
Supporting British Businesses
Of particular interest are the commitments in the Autumn Statement to support and restore private sector growth. The government aims to remove barriers for investment and to cut taxes on businesses. Green industry, digital technology, science, and manufacturing are all sectors the government intends to support. The Chancellor has also vowed to back start-up businesses.
Commenting on the measures to support innovation, Arran Dewar, Executive Director at SIS Ventures, said, “As the Chancellor has rightly said, innovation is the key to our future success as a nation.”
However, he added, “Within today’s broad package of investment for innovation, we’d also like to see further consideration given to prioritising investment for those ideas and businesses which are delivering positive impacts for people and planet, not just profit.”
Interestingly, one of the focuses of this statement is the UK’s desire to become a world-leader in Artificial Intelligence (AI). In the Spring Budget of 2023, the government allocated £900 million in compute/tech investments. In the Autumn Statement, an additional £500 million has been invested in the development of Artificial Intelligence. According to the official document, “these investments will allow researchers and SMEs to develop new foundation models and maximise the UK’s potential in AI, enabling, for example, the discovery of new drugs.”
According to Jonathan Boakes, Managing Director at Infinum, this allocation plus the provided tax deduction on IT expenditures shows a robust support for technological innovation. However, there is still a concern that this investment will “not be used wisely.”
In an email statement, Boakes said, “Success in the AI revolution demands more than just plugging gaps with cash. It requires strategic planning, workforce training, and expert collaboration to maximise the impact and prevent implementing AI for AI’s sake. The rush to embrace AI carries the risk of hasty decisions fueled by FOMO, jeopardising sound judgment. While the financial boost is appreciated, it must come with clear guidelines and support from the Government to empower businesses in utilising it effectively.”
Claire Trachet, CEO and founder of business advisory firm, Trachet, was a bit more optimistic. “The government’s continued commitment to strengthening the country’s position in artificial intelligence through a further £500m in funding for UK AI will enable tech firms to bring cutting-edge products to market faster and ensure that Britain doesn’t lose its spot as a leader in Europe for this sector.”
Additionally, she said that the statement “provided welcome news for what has been a turbulent economic period for the UK’s investment ecosystem… [W]ith the extension of the tax break as well as introducing measures to boost foreign investment, relief is on the horizon for companies that have been facing major economic challenges.”
Finally, some experts noted the distinct lack of improvement to cybersecurity efforts. Al Lakhani, CEO of IDEE, commented, “As a severe and universal threat to businesses and nation-states alike, it is imperative that the public and private sectors work together to create an environment that allows for the development and adoption of world-class cybersecurity solutions.”
“Simplifying R&D tax credits has been a necessity for years, and the Chancellor was right to acknowledge this, albeit very briefly. But it is too early to celebrate; we need to see what shape the reforms will take, and what types of R&D investment will be eligible. Cybersecurity must be one such area, as it is imperative that companies are encouraged to invest in robust cybersecurity infrastructure.”
In conclusion, the 2023 Autumn Statement has provided a set of long-term plans following a period of economic upheaval where shocks like the pandemic limited the government’s ability to provide relief. With the goal to significantly bolster the UK economy over time, these measures will hopefully mean an increase in business investment, a reduction in debt, lower taxes, and a leading AI ecosystem.
While the importance of cybersecurity has not yet risen in the esteem of the Chancellor of the Exchequer, there is no doubt it will one day become a top priority, hopefully before it is too late.
The post AI Receives £500 Million Funding in Finance Minister’s 2023 Autumn Statement first appeared on IT Security Guru.
The post AI Receives £500 Million Funding in Finance Minister’s 2023 Autumn Statement appeared first on IT Security Guru.