The chancellor Philip Hammond has set out his ‘vision for Britain’s future’ with a budget speech outlining how government will invest in the ‘technologies and skills of the future’.
Measures announced in Parliament include efforts to improve productivity, further investment in R&D (plus an increase the main R&D Tax credit to 12 per cent), funding for the teaching of maths and computer science, a commitment to roll out digital technologies and skills training, and further investment in transport infrastructure.
“When I took this job I committed to make the battle to raise Britain’s productivity, and thus the nation’s pay, the central mission of the Treasury,” said Hammond. “Last Autumn I launched the National Productivity Investment Fund, to provide an additional £23bn of investment over five years to upgrade Britain’s economic infrastructure for the 21st Century. Today I can announce that I will extend this fund for a further year and expand it to over £31bn.”
Hammond also confirmed the allocation of £2.3bn for investment in R&D, adding that the government’s Industrial Strategy aims to increase R&D investment across the economy to 2.4 per cent of GDP.
Commenting on Hammond’s R&D Tax credit announcement, Lee Hopley, EEF chief economist said: “The chancellor is putting real resource into delivering its target of 2.4 per cent of GDP on R&D over the next decade.
“The additional allocations from the National Productivity Investment Fund devoted to R&D and the increase R&D tax credit should help ensure the public and private sector are moving in tandem towards this important goal.”
Investment in maths and science in schools will comprise £27m to help improve how maths is taught in 3,000 schools, and £49m to help students resitting GCSE maths. Schools will also receive £600 for every extra pupil who takes A level or Core maths. Extra funding worth £350,000 a year will be given to every specialist maths school that is set up across the country, and the number of fully-qualified computer science teachers will rise from 4,000 to 12,000.
A further £34m will go towards teaching construction skills, whilst £30m will be invested in the development of digital skills distance learning courses. The world’s first national advisory body for artificial intelligence (AI) – the Centre for Data Ethics and Innovation – will also be established to set standards for the use and ethics of AI and data.
“Our future vehicles will be driverless, but they’ll be electric first, and that’s a change that needs to come as soon as possible,” said Hammond. “So we’ll establish a new £400m charging infrastructure fund, invest an extra £100m in Plug-In-Car Grant, and £40m in charging R&D. And I can confirm today that we will clarify the law so that people who charge their electric vehicles at work will not face a benefit-in-kind charge from next year.”
Further investment in northern England will see £337m funding of 40-year-old rolling stock on the Tyne and Wear Metro, and £123m ploughed into the Redcar Steelworks site. Local authorities that support high-value infrastructure projects will be able to apply for discounted lending from a £1bn fund.
Commenting on today’s announcement, Nick Roberts, Atkins’ UK & Europe CEO said: “Through this Budget [the] chancellor has put digital and technology at the heart of the British economy, helping maintain our position at the forefront of the technological revolution and providing a solid platform to build future growth.
“From the trials in mobile and digital connectivity on the Trans Pennine route and investment in AI and 5G technology, to the evolution of our road transport from internal combustion to electric to fully autonomous, the government is driving the infrastructure that secures our digitally-enabled future.
“Furthermore the acknowledgement that we simply have to invest in providing the country’s workforce with the digital skills needed to make the most of these opportunities is a significant step forward and should be welcome.”
A full reaction round-up to the Budget will be published on November 23, 2017.