2018 Budget pledges UK cyber spend boost

News by Mark Mayne

New budget emphasises cybersecurity and high tech growth, but also introduces new digital services tax.

The UK Chancellor Philip Hammond’s 2018 Budget has pledged significant funding for a range of high-tech enterprise, including a nod to cyber-security, as well as a controversial new digital services tax.

The budget promises ‘an additional £1 billion for the Ministry of Defence across 2018-19’ specifically to allow the MoD to "prioritise key capabilities such as offensive cyber, anti-submarine warfare and the nuclear deterrent". However, the exact apportionment to cyber-security is not clear, as security experts were quick to point out.  

Max Vetter, Chief Cyber Officer at Immersive Labs said to SC Media UK that: "Money spent on cyber-security is always a good thing, but Hammond’s budget announcement suggests there is £1 billion available for the Ministry of Defence – not specifically cyber-security. Obviously, the proportion of that figure that’s designated to cyber-security will define the impact it has on our digital landscape. Whatever the figure is, it must be made to work hard."

Andy Barratt, managing director at cyber security consultancy Coalfire, commented that: "An extra £1 billion of funding for the MoD to finance security services including cyber is certainly a positive move from the government. Apart from that, the Budget was a quiet one for the cyber-security community. A number of cyber-initiatives have been mooted by the government this year including a national council to govern standards in the industry, potentially leading to the creation of another regulatory body. While it’s encouraging to see the government taking an active interest in cyber-security, I don’t believe that these kind of wholesale changes are what’s needed. For a start, a proportion of government spend on cyber gets used for offensive and military intelligence capabilities. There is always the risk that some of these capabilities get leaked into the private criminal sector."

Other specific cyber-security high-points from the 2018 Budget include a new £50 million per year fund designed to address "the most pressing challenges" in areas such as public health and cyber-security. In addition, the Chancellor name-checked a broad range of high-tech markets, promising a further £235 million to support the development of quantum technologies (including a new national quantum computing centre), the establishment of a Cryptoassets Taskforce to set out the UK’s approach to crypto assets and distributed ledger technologies in financial services, as well as a £50 million package to establish Turing AI Fellowships to attract top AI researchers.

Ian Bancroft, EMEA Vice President and General Manager, Secureworks said that concentrating on attracting a skilled workforce was vital. "With advances in technology like AI and IoT, as well as the increasing threat from state-funded cyber-criminal organisations, the need for additional resource in cyber-security has never been higher. While the budget called out investment to support cutting-edge science and technology to create highly-skilled jobs and transform the economy, it’s important that the government does not lose sight of the workforce that it needs to make this a reality.

"The commitment by the UK government to increase defence spend by £1bn, including £160m for counter-terrorism, as well as the £50m fund to support pressing concerns like cyber-security demonstrates that cyber-defence is being considered but more still needs to be done to ensure the safety of UK business and citizens today and in the future. Ensuring that the cyber-security sector is effectively resourced needs to be a top priority for policy makers following today’s budget announcement."

Inevitably, the Budget also introduced new measures to swell the Government’s coffers, one potentially controversial strategy for the cyber-security community being a new digital services tax. Chris Denning, head of international and corporate taxation at MHA MacIntyre Hudson, said that the new tax could have significant repercussions: "The specific details of the digital services tax will follow further consultation but we already know the types of businesses it will apply to, such as search engines, social media platforms and online marketplaces who derive value from their user bases. This tallies with the government’s previously expressed views on the types of companies such a tax should apply to, and on what basis.

"This tax is clearly aimed directly at US technology companies. When the news sinks in across the pond it could raise the possibility of retaliatory measures from the US government. Dragging the UK into an acrimonious quarrel with one of its largest trading partners is perhaps not what the Chancellor intends."

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