Rishi Sunak delivered the first budget of the new Government today.
A headline grabbing, record increase in R&D investment to £22bn a year by 2024 was announced – taking R&D spending ahead of the USA, Japan, France and China. A series of other investments notably signal the Government’s intention to promote technological disruption. They included £1.4bn into the Science Institute at Weybridge, £1bn investment for green transport solutions, £800m into a new blue skies funding agency modelled on Advanced Research Projects Agency in the US and £200m to unlock the potential of the UK’s best innovations in health technology and life sciences.
Entrepreneurs slightly less relieved
Touted for complete scrapping before the Budget, the Chancellor chose instead to substantially prune Entrepreneurs Relief, cutting the lifetime benefit from £10m to £1m.
However, the government will review the Enterprise Management Incentives scheme to ensure it provides support for high-growth companies and announced £200m of new funding for the British Business Bank to invest in scaleups. £5bn of loans will support exporting and a series of new local champions will be based at key overseas posts to support exporters from the Northern Powerhouse, Midlands Engine, and Western Gateway, helping to meet the ‘levelling up’ agenda.
Infrastructure streams ahead
The Budget contained a huge £600bn package (much of it existing spending) for infrastructure. New spending included the £6bn trailed at the weekend to deliver UK wide digital connectivity and 4G across 95% of the country.
Promoting competition in the digital economy
Although the Digital Services Tax wasn’t mentioned, the importance of technology in the economy was a consistent theme. A new cross-regulator taskforce, based in the Competition and Markets Authority (CMA), will report to the government on a pro-competitive regime for digital platform markets. This will include advice on implementing a pro-competitive code of conduct for digital platforms with strategic market power. The government will ensure that regulatory reforms applying to digital and tech businesses are pro-innovation and coherent.
Fintech remains central to the Treasury’s thinking
The Government announced a review into the Fintech sector, led by Ron Kalifa OBE but also extended the funding for the Tech Nation Fintech Delivery Panel and Insurtech Board, to continue the critical work in identifying and removing barriers to economic growth for the UK fintech and insurtech sectors.
Blunting the impact of Corona
A £30bn fiscal stimulus contained a number of proposals to reduce the impact of expected staff absence and weakening consumer demand. The Government will reimburse businesses for coronavirus related sick pay and introduced measures to help businesses with any cashflow issues that arise. Keep up to date with Tech Nation’s work. Sign up to our newsletter here.
NB The Chancellor removed VAT on digital books and newspapers, moving it in line with physical books. If you fancy reading our own recommendation – take a look at Upscale….