The British government will establish a £165 million (A$352.5 million) fund to invest in or buy cyber security start-ups and double its spending on fighting cybercrime to £1.9 billion a year by 2020, chancellor George Osborne announced today.
At a speech at Britain's GCHQ intelligence service, Osborne said the £165 million defence and cyber innovation fund would “support innovative procurement across both defence and cyber security".
The government will also build two innovation centres to help commercialise innovation in universities and provide training and mentoring for cyber security entrepreneurs, Osborne said.
"Government can itself provide a huge boost for British cyber start-ups, if it can be smart enough to marshal its procurement in a coherent way," he said in the speech.
"This should be a win-win – our cyber start-ups need endorsement, investment and first customers.
And government, from our military and GCHQ to the Government Digital Service and the NHS, need to be able to procure excellent cyber security hardware and services."
The announcement was made as part of a new five-step plan for national cyber security, which will see spending on offensive and defensive cyber security double to £1.9 billion over five years.
Osborne said last year GCHQ dealt with 100 national cyber security incidents per month, and that figure had now risen to 200 per month.
"Each of these attacks damages companies, their customers, and the public’s trust in our collective ability to keep their data and privacy safe," he said.
"Imagine the cumulative impact of repeated catastrophic breaches, eroding that basic faith in the internet that we need for our online economy and social life to function."
He also revealed UK intelligence agencies were developing the capability to launch offensive cyber attacks on terrorists for the first time.
"We need to establish deterrents in cyber space. We need to not just defend ourselves against attacks but rather to dissuade people and states from targeting us in the first place," Osborne said.
The UK government will also established a single national cyber centre, reporting into the director of the GCHQ, to serve as the single point of advice and support for cyber security.
"The centre will make it easier for industry to get the support it needs from government. And make it easier for government and industry to share information on the cyber threat to protect the UK," Osborne said.