Budget plans aimed at boosting UK's hi-tech future
In the annual Budget, Chancellor Philip Hammond revealed the government’s plans to boost the UK's hi-tech future by investing in the skills and infrastructure needed for the jobs of the future.
22 November 2017
UK Chancellor Philip Hammond presented his blueprint for boosting Britain's hi-tech future, which would be “full of change, full of challenges and full of new opportunities”, as he unveiled his annual Budget to parliament.
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As expected, Mr Hammond also revealed tax breaks for transfers of North Sea oil and gas fields, which he described as “an innovative tax policy that will encourage new entrants to bring fresh investment to a basin that still holds up to 20 billion barrels of oil”.The chancellor also committed at least £44 billion in capital funding, loans and guarantees over five years to support house-building and deliver 300,000 new homes a year. To help first-time buyers, they will no longer have to pay stamp duty on home purchases up to £300,000 in England and Wales.
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The growth of the UK economy
Pointing out that the UK economy “continues to grow, continues to create more jobs than ever before, and continues to confound those who seek to talk it down”, he pointed to the latest forecast from the Office for Budget Responsibility (OBR) which estimated that 600,000 more jobs would be created by 2022 at a time when employment levels were already at a near-record high.Mr Hammond said the principal aim of the Budget was “to invest in the skills and infrastructure that will support the jobs of the future”.The OBR also expected the national debt to peak this year and then gradually fall as a share of GDP, which the chancellor hailed as a “turning point in our recovery”.Measures to boost economic performance
However, the OBR has also cut its forecasts for UK economic growth, from the two per cent this year it was predicting in March to 1.5 per cent...a level not expected to be seen again until 2021.In a bid to boost economic performance, Mr Hammond announced that the National Productivity Investment Fund, which supports infrastructure projects across the country, would be increased from the current £23 billion to £31 billion and that its timespan would be increased from five to six years.Additionally, the new Transforming Cities Fund will earmark £1.7 billion to elected mayors in cities outside London to give them the “fire power” to deliver local infrastructure and development priorities.Mr Hammond added, “We are allocating a further £2.3 billion for investment in R&D and we’ll increase the main R&D tax credit to 12 per cent (representing) the first strides towards the ambition of our industrial strategy to drive up R&D investment across the economy to 2.4 per cent of GDP.”Boosting digital skills through a National Retraining Scheme
A new partnership was also announced between the government, Confederation of British Industry (CBI) and the Trades Union Congress (TUC) to “set the strategic direction” for a National Retraining Scheme to boost digital skills and support expansion of the construction sector.There will also be a £30 million fund for the development of digital skills distance learning courses; an investment of £500 million in a range of technological initiatives including AI and fibre broadband; and an action plan to unlock more than £20 billion of new investment in UK scale-up businesses.The Budget also allocated £400 million to fund a charging infrastructure for electric vehicles and £40 million to boost R&D in electric battery research.Related news:
- Business applauds skills drive in Budget
- CBI calls for a 'leapfrog' industrial strategy in the tech age
- Jump in UK productivity as unemployment falls
As expected, Mr Hammond also revealed tax breaks for transfers of North Sea oil and gas fields, which he described as “an innovative tax policy that will encourage new entrants to bring fresh investment to a basin that still holds up to 20 billion barrels of oil”.The chancellor also committed at least £44 billion in capital funding, loans and guarantees over five years to support house-building and deliver 300,000 new homes a year. To help first-time buyers, they will no longer have to pay stamp duty on home purchases up to £300,000 in England and Wales.
Other Budget headlines included:
- an additional £2.8 billion for the National Health Service in England, £350 million to be provided immediately, £1.6 billion in 2018-19, and the remainder in 2019-20.
- a switch next year from the retail price index to the consumer price index (which is always lower) in calculating annual rises in business rates, bring estimated savings to companies of £2.3 billion over five years.
- an extra £3 billion over the next two years for Brexit preparations.
- £40 million to train maths teachers and the number of trained computer science teachers to be tripled to 12,000.
- Income tax to be applied from April 2019 on digital economy royalties relating to UK sales, which are paid to a low-tax jurisdiction, raising about £200 million a year.
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