Chancellor George Osborne has delivered a tough Emergency Budget, that offered very little for the IT industry or IT workers.

Tough government technology decisions were also left until the Spending Review in October, though with 25 per cent cuts over four years in most government departments, IT projects will feel the squeeze.

The Chancellor said that the mesures were vital to slashing the country’s £155 billion deficit. Among other measures, value added tax will rise to 20 per cent next year, child benefit will be frozen and tax credits for higher-earning families will be reduced. Means-tested pensions will be reintroduced.

Video games companies were directly punished in the Budget, with the Chancellor saying the tax relief planned by the former Labour government for that industry will not go ahead. The idea had been “poorly targeted”, he said.

In addition, the communications industry will be left to fund the vast part of the national high speed broadband rollout, with the 50 pence a month broadband tax for consumers being abolished. The underspend from the digital switchover within the TV licence fee will contribute some cash to aid the rollout.

The only positive news for the IT industry comes for a moe generous capital gains regime for entrepreneurs and a move to help small companies via steps to increase bank lending to SMEs. Business secretary Vince Cable said last week that this was the “key bottleneck” in the system, and the government is increasing efforts to force nationalised banks Lloyds and the Royal Bank of Scotland to hit their spending targets.

Corporation tax will also be reduced over the five-year government term from 28 per cent to 24 per cent, which Osborne said would directly help small businesses the most. Additionally, any new businesses outside London and the south east will be exempt from £5,000 national insurance payments for up to the first 10 employees.