DTI reveals Budget's IT package for SMEs

DTI's Secretary of State, Stephen Byers, today (March 27) gave further details of measures set out in the Budget 'to encourage innovation, enterprise and the use of IT by businesses' and predicted that Britain would become the world's best environment for e-commerce in three years.

The projects - to support small and medium sized - will cost £110 million, comprising a £50 million regional innovation fund for 'business clusters and incubators in the regions' and a £60m package for small firms to 'make sure they understand the benefits of the Internet; to help them get on line; and to enable them to access business advice and make tax returns over the internet'. The Small Business Service will use £20m to develop a business advice service, both on line and at the end of a telephone, to be up and running from April 2001.

Mr Byers said: "Our policy is based on skills, innovation and enterprise. Our task is to promote a more enterprising knowledge-rich economy, able to take advantage of new market opportunities and able to adapt to change. It is about ensuring that all our regions benefit from our enterprise agenda. I want to see high growth firms in all sectors and in all our regions.

"Today's measures will remove barriers to growth and stimulate more dynamic enterprises. We want Britain to lead the next stage of the internet revolution. Our target is that within three years, we will become the world's best environment for electronic commerce. Today's package of support for small firms coupled with the 100 per cent capital allowances on IT equipment will make a significant contribution towards achieving this objective."

The £60 million to 'help small businesses get on-line' includes:

*£10 million to boost the network of Information Society Initiative (ISI) Advice Centres throughout the UK and 'inject greater urgency into the Government's awareness campaign so that small businesses can make more effective use of information and communication technologies';

*£20 million for the Small Business Service (SBS) to create a "Gateway" through which people can 'get guidance, advice and information needed to start or run a small firm'. It is proposed that by April 2001, entrepreneurs will have open access to such help via the internet, via a call centre, a fax or through business advisers;

* £30 million will be used by the Inland Revenue and HM Customs and Excise to create an infrastructure for secure electronic services between the Government, businesses and individuals.

Regarding the purchase of IT equipment, for the three years from April 1 this year, small businesses will be able to claim 100 per cent first year capital allowances, thereby 'getting immediate tax relief on the whole cost of their investment'.