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The “world’s next Silicon Valley” is unlikely to be in Britain 

Legislation needs to catch up with Rishi Sunak and Jeremy Hunt’s lofty ambitions for UK tech.

By Matthew Gooding

Rishi Sunak unveiled four new government departments as part of his cabinet reshuffle on Tuesday (7 February). Alongside the creation of the Department for Energy Security and Net Zero and the Department for Business and Trade, the Prime Minister chose to create a standalone ministry overseeing science, innovation and technology (SIT). The Department for Digital, Culture, Media and Sport (DCMS), now shorn of its digital responsibilities, will be known simply as CMS.

While the reshuffle has been largely viewed as a damp squib, the government hopes the reorganisation will prove significant for its technology sector ambitions. Both Sunak and the Chancellor, Jeremy Hunt, have said that tech will be key to the future of the nation’s economy. Hunt used a speech last month to reiterate his desire, first stated in November’s autumn statement, to make the UK home to the “world’s next Silicon Valley”.

“If anyone is thinking of starting or investing in an innovation or technology-centred business, I want them to do it in the UK,” Hunt said in his speech, describing this goal as “ambitious but achievable” in the long term.

[See also: Who killed Silicon Valley bank?]

The creation of SIT is being billed as a step towards fulfilling this aspiration. “Having a single department focused on turning scientific and technical innovations into practical, appliable solutions to the challenges we face will help make sure the UK is the most innovative economy in the world,” a No 10 statement said.

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But while Hunt and Sunak may have big ambitions, much of the government’s legislative programme relating to tech has been mired in delay, confusion and controversy. In November Hunt backtracked on plans to scrap reforms to the IR35 tax rules, introduced during Kwasi Kwarteng’s short spell as chancellor. The reforms will place a significant additional administrative burden on tech companies who work with contractors when they come into effect in April.

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The government has also paused work on the Data Protection and Digital Information Bill, the UK’s post-Brexit replacement for Europe’s GDPR data rules, to allow further consultation, with no clear indication on when it will return to the Commons.

Meanwhile the Online Safety Bill, designed to keep internet users safe, has been criticised by IT professionals surveyed by BCS, the UK’s chartered institute for IT, as “not fit for purpose”. Concerns have also been raised over the threat that the bill poses to the security of end-to-end encryption.

The government has yet to lay out a timetable for its quantum technologies strategy, while a report from MPs on the BEIS committee (of the now-divided Department for Business, Energy and Industrial Strategy) has accused it of “overlooking” the UK semiconductor industry. A long-promised blueprint for the sector, seen as strategically important by governments around the world, is yet to materialise. On Friday (3 February), Darren Jones, chair of the BEIS committee, described the continuing absence of a strategy for chip production as “an act of national self-harm”. The government says it will be published “as soon as possible”.

When industry figures look at this track record, they will likely be sceptical about whether Sunak and Hunt can deliver on their lofty ambitions. Wherever the world’s next Silicon Valley materialises it seems unlikely to be in the UK.

Matthew Gooding is the managing editor of Tech Monitor.

[See also: A reckoning for Silicon Valley]

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