- Outlook: Growth to average 1.4 per cent a year over the next five years
- R&D: £2.3bn investment in R&D
- Teaching: £76m for maths education in schools
- Transport: £1.7bn to improve transport in English cities; £100m in Plug-In-Car Grant
- Housing: £15.3bn new financial support for house building over the next five years
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.”
Budget reaction round-up
“Enhanced support for emerging technologies such as AI will help to attract and unlock investment in UK innovation. However, we cannot take advantage of these rapidly growing new areas unless we equip people with the skills to understand and use them. I welcome initiatives to build and promote high-quality apprenticeships and to support the implementation of T-levels which will help to address the skills gap. This along with new funding and incentives to boost mathematics and computer science education in schools and colleges will equip the next generation of engineers with the skills needed to bring value to the economy.”
Professor Dame Ann Dowling OM DBE FREng FRS, president of the Royal Academy of Engineering
“Earlier in 2017 we learned that government support for R&D and investment in a better educated workforce was top of UK manufacturing executives’ wish list. The chancellor has today gone some way in supporting both of these points, further efforts to encourage investment in R&D are to be applauded as is the action plan for supporting innovative start-ups. Other countries aren’t holding back on investment so neither can we.”
Stephen Cooper, head of Industrial Manufacturing, KPMG UK
“Through this Budget 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 Transpennine 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.”
Nick Roberts, Atkins’ CEO for UK & Europe
“To reach their target of R&D investment across the economy of 2.4% of GDP, the Government must attract private investment of over £8bn of globally-mobile R&D budgets. To continue to invest here through the uncertainty of Brexit, research-intensive companies are clear that the UK must provide a competitive economy with a healthy research base and immigration and regulation systems that support international R&D.”
Dr Sarah Main, CaSE (Campaign for Science and Engineering) executive director
“Building on the good framework put in place for passengers by Transport for the North, the Chancellor is right to prioritise further investment for rail in the north. Improving the connections between the HS2 line and cities not directly on the route is vital if we are to ensure that it brings benefits to everyone. As a northern focussed business, we welcome this.”
Nick Crossfield, managing director of Alstom UK & Ireland