Chancellor Gordon Brown told the world in March that he wants the UK to be "the best place for ecommerce... up with the United States as soon as possible".
He's still waiting. A recent spate of IT companies reversing their decision to invest in the UK means that Brown's hopes of achieving that American dream could be a long time coming.
UK dotcoms and foreign firms claim they are stymied by stiff tax penalties on rewarding their employees through greater share ownership.
"The whole thing is a mess. It needs looking at," says Steve Rist, chief executive of web house-selling firm, Easier. His reaction to the government's handling of taxation on employee share options is typical of many UK high-tech startups. They feel that the government has levied a stealth tax against the technology sector that contradicts Tony Blair's rhetoric about turning the UK into a breeding ground for web entrepreneurs.
The crux centres on Westminster's demand for a big slice of the cake: in this case, employer National Insurance Contributions (NICs) on the value of share options, which all firms must pay at a fixed rate of 12.2 per cent.
In 1999, as part of the last Budget, this tax was extended to include the share option incentives given to employees by their bosses. This immediately angered both UK dotcoms and those mainstream, often overseas-based, technology firms who use share options as a way of attracting staff without having to pay huge salaries.
Angry response continues unabated
Any hopes in Whitehall that the round of abuse that greeted the proposal had been silenced - through a series of concessions given in May - have been firmly squashed. As reported in Computing last week, US data security software firm Veritas cited share option taxation as one of the core reasons for cutting its UK investment in the UK by 50 per cent, to £250 million.
"The reason we didn't go ahead was partly because of the taxation decisions by the government," claimed Veritas vice president, Philip Bousfield.
Rumours continue to circulate that Cisco has decided to place 3,000 jobs in the Republic of Ireland rather than the UK, because of this taxation overhead. The company has denied the reports.
"It's difficult for us to fill all the places we have at the company. Cisco is looking wherever it can to find the right skill-sets," says Maggie Morrison, operations director for Scotland and Ireland.
"Yet Cisco still seems like a prime candidate to review investment in the UK, because of its policy of giving share options to 40 per cent of its top staff in all 75 countries in which it has offices.
A weapon to beat UK policy with
What is certain is that, like the euro issue, the taxation of share options is a weapon overseas firms have been handed to beat up the UK government's industrial policy. Andrew Bell, tax partner at PricewaterhouseCoopers, claims the issue could well mean fewer international firms choosing to base operations and research in the UK - reducing the strength of the industry, and with it, the labour pool.
The effect on dotcoms is more immediate, says Helga St-Blaize, co-founder of IT business-to-business site Ace-quote.com, acquired by Germany's DCI for DM85m (£27m) in May.
"Recruitment in the current climate is extremely hard for us, given the crash of firms like boo.com. This is yet another factor holding possible new staff back," she worries.
Give us a tax-break...
In its defence, the government says it has listened to critics, and allowed some tax-breaks on share options. It has two 'approved' schemes which allow gains from share options within such schemes to be paid tax-free.
But one has a limit of £30,000-worth of shares, seen as too low for high-flyers, and the other only works with up to 15 people - so a firm hoping to follow the Microsoft model, in making all its staff rich, has to use a 'non-approved' (and thus fully-taxed) scheme.
Easier's Rist says the 15-person limit is less progressive than it first appears. "The whole company takes a risk. Why shouldn't the receptionists benefit? And customer service people probably matter more than anyone else, day-to-day."
The Chancellor is unlikely to make any further concessions, for fear of losing face. Despite the boosts to IT in the last two Budgets, and the installation of an ecommerce minister, many feel New Labour is still not doing enough to boost the New Economy - and rather too much to boost its own income through taxation.
Cotton seedling freezes to death as Chang'e-4 shuts down for the Moon's 14-day lunar night
Fortnite easily out-earns PUBG, Assassin's Creed Odyssey and Red Dead Redemption 2 in 2018
Meteor showers as a service will be visible for about 100 kilometres in all directions
Saturn's rings only formed in the past 100 million years, suggests analysis of Cassini space probe data
New findings contradict conventional belief that Saturn's rings were formed along with the planet about 4.5 billion years ago