It is not anything new that industries in the UK are asking for help from the government amidst the COVID-19 pandemic, and the tech sector is not exempted. However, no help is being offered to the tech sector at the moment. This was the plight expressed through a letter to the Chancellor by one of the 12 leading renowned tech companies’ figures in the UK.
Confusion and criticism about the intention of the letter arose just a couple of hours after its arrival. Some of this criticism arose within the tech sector itself. Many people believed that this appeal came from companies that do not really need help.
The challenges highlighted by the letter include:
- The three primary schemes through which aid is being sent to UK companies.
- Tech businesses that most likely will not make any profit in years to come may not qualify for any of the aid schemes.
- The aim of these schemes is to help small businesses and high-growth tech companies are not in this category.
- Businesses need an investment-grade credit rating and it may take months for a new business to acquire one.
The [purpose of these schemes claims to be providing help for all kinds of businesses, ranging from small-scale to medium-scale, to large-scale businesses. However, no help is being offered to tech companies in the UK. While some of these companies need support in securing a temporary facility for its operations, the government hasn’t been able to provide the help they need. The UK government can partner with reliable companies like Smart-space in other to offer assistance to these companies.
In the letter, the industry leader was soliciting help with sorting out these issues from the task force. However, the people responsible for providing help to the tech sector highlight that they are still trying to work out the formalities for the perfect rescue scheme for them.
However, the Treasury did not fail in expressing its sympathy for these businesses. They stated that there are currently efforts being made between the government and the venture capital finance sector to help sort these issues and determine the best way to offer support. However, while a lot of tech businesses, especially startups, are facing a difficult period it is not evident that they all need help.
One of the leaders stated that the reason for writing the letter is not meeting the needs of top tech businesses but a way of showing support for the entire tech sector. He emphasized that the small-scale tech businesses were meant to be the major beneficiaries of the letter. However, he refused to make a statement when he was asked if his company would mind not getting help from the government.
A prominent venture capitalist in the UK stated that should the government decide to help the tech sector, they would also need to determine the cut-off line. He argued that a lot of tech business startups were also struggling before the pandemic. Hence, there should be a way that the government fairly determines this. Providing help for such businesses may not be an appropriate use of public funds.