What will a Boris Johnson government mean for the tech sector?

A Boris Johnson premiership is now a reality after the MP Uxbridge and South Ruislip was elected new Conservative leader in a ballot of party members.

Johnson has inherited a political crisis that is partly of his making and his policy on Brexit is the subject that has attracted the most attention from the tech sector.

Silicon Valley Bank, a high-tech commercial bank, said that 75 percent of the UK executives polled in its 2019 Start Up Outlook Report believed that leaving the EU would have a negative effect on their business. Their chief concerns are that the country will leave the single market, no longer be as attractive to European founders, that foreign talent will become less accessible and that there will be less support available from EU and venture capital funding.

Julian David, CEO of IT trade association techUK, responded to the election result by urging Johnson to avoid a no-deal Brexit.

"TechUK's members have repeatedly warned of the damaging impact that a No Deal Brexit would have on their business and we would urge Mr. Johnson to put all the talent and resources at his disposal to the task of avoiding this outcome,"  he said. "This will be vital if we are to succeed in securing many of the opportunities that lie ahead for the UK beyond Brexit."

The new prime minister is also expected to reverse some of the controls on public spending imposed by current chancellor Phillip Hammond. An advisor of Johnson told the Telegraph that he was aiming for "a fiscal loosening of less than one percent of total public spending".

How much of this extra government funding goes to the tech sector remains to be seen. His pledge to lift the higher rate income tax threshold from £50,000 to £80,000 could be a boon to some IT professionals, but lower earners in the gig economy may be concerned by his support for restrictions on trade union activity.

Broadband promise

Johnson's leadership campaign contained little about tech policy beyond a pledge to roll out full fibre broadband across the UK by 2025, eight years ahead of the government's current target of 2033.

Richard Watts, sales and marketing director of VX Fiber, a digital infrastructure company, believes the target is currently not realistic.

"UK government funds and initiatives such as the Digital Infrastructure Investment (DIIF) fund investing in fibre rollout, and the Local Full Fibre Networks (LFFN) Challenge fund, are going some way to help with this," he said.

"But there are crucial considerations that need to be addressed if we are to oil the wheels of the UK's 5G and broadband machine. Deploying the infrastructure (full fibre network) takes time – it requires updated planning policies, regulation and collaboration between local authorities, councils and the companies deploying the fibre."

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Johnson has suggested that technological solutions could prevent a hard Irish border, despite the Home Secretary's Policy Unit believing such a system could be more than a decade away, and has called for new income tax on global technology giants

"I think it's deeply unfair that high street businesses are paying tax through the nose... whereas the internet giants, the FAANGs - Facebook, Amazon, Netflix and Google - are paying virtually nothing," he said. "We've got to find a way of taxing the internet giants on their income, because at the moment it is simply unfair."

Record as MP and Mayor

London became a global tech hub during Johnson's eight-year stint as mayor that ended in 2016, but the results of the digital initiatives he introduced has varied.

His supporters will point to the success of Tech City, which Johnson and then-Prime Minister David Cameron launched in November 2010 with the objective of supporting the growth of the "Silicon Roundabout" technology cluster in Old Street.

The area has hosted headquarters for unicorns including Deliveroo and Monzo, hubs for the likes of Google and Cisco and partnerships with a number of universities. In 2012, Tech City was estimated to have the third-highest concentration of startups in the world behind New York and San Francisco.

Less successful were the Million Pound Startup competition, which was closed because none of the 1,000 entrants were deemed worthy of the £1 million prize, and the Digital Shoreditch Festival, which the Guardian reported was cancelled due to a lack of resources.

Other initiatives introduced under Johnson included the £24 million London Schools Excellence Fund for computer science projects; the London Tech Ambassadors Group to promote the sector's interests; the International Business Programme, which gives fast-growth businesses mentoring and private sector backing to help them scale overseas; and a £25 million contribution to the London Co-Investment Fund for small tech companies.

Johnson's tenure as an MP also featured little action on tech, although he historically voted for the retention of personal and online data as part of the 2016 Investigatory Powers Act (the 'Snoopers' Charter').

His reputation in the tech sector divides opinion and little is known about his digital plans for the future. He has promised to be "the most pro-business PM" but also infamously remarked "f*** business". His actions as prime minister will prove which of these is truer.

Copyright © 2019 IDG Communications, Inc.

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