Government dodges near-£15m tech bill after securing Microsoft deal

The Government has dodged a near-£15 million tech bill after securing a deal with Microsoft that shields it from major price hikes that have hit consumers and businesses following the Brexit vote-induced collapse in the pound.

It is understood that the US tech giant has agreed to extend an agreement on existing terms with the Government into 2018, saving millions of pounds had price hikes been factored into the deal.

The contract will apply to about 200,000 central Government users, according to The Register, which first reported on the agreement.

Meanwhile, UK consumers and business customers have been hit with double-digit price hikes.

In October, Microsoft announced it would raise the cost of software services for businesses in the UK by as much as 22% as a direct result of the post-Brexit-vote collapse of the pound.

Those price hikes, which would see enterprise software rise 13% and cloud prices jump as much as 22%, came into effect on January 1.

It said the decision was made in order to "realign close to euro levels". and harmonise prices across the EU.

By February, Microsoft increased prices on a raft of consumer products including laptops and tablets by as much as 15%, saying the move was made to "align to market dynamics".

Microsoft declined to comment on the Government contract, saying it did not comment on customers.

Liberal Democrat Treasury spokeswoman Baroness Kramer said: "This is another example of the bad deal business are getting out of the hard Brexit that Theresa May is relentlessly pursuing.

"With Theresa May dragging the UK out of the single market and the pound suffering from a lack of clarity, I can only imagine UK businesses will continue to get hit like this in the coming years."