The chancellor's investment-led recovery includes the establishment of new port infrastructure to support offshore wind projects, £68m for the development of energy storage prototypes, the publication of the prospectus for the £4.8bn Levelling Up Fund, new Freeports in England, and a new super deduction scheme that cuts a company’s tax bill by 25p for every pound invested in new equipment. From 2023 corporation tax will increase to 25 per cent for businesses with profits greater than £250,000.
Further measures outlined in parliament include the establishment of an Infrastructure bank in Leeds and a new two-pronged Help to Grow scheme for SMEs that will see government pay 90 per cent toward the cost of management courses plus free training for digital skills and a 50 per cent discount on new productivity-enhancing software.
Sunak told Parliament: “This Budget meets the moment with a three-part plan to protect the jobs and livelihoods of the British people. First, we will continue doing whatever it takes to support the British people and businesses through this moment of crisis. Second, once we are on the way to recovery, we will need to begin fixing the public finances – and I want to be honest today about our plans to do that. And third, in today’s Budget we begin the work of building our future economy.”
To boost skills, companies in England are being incentivised to hire apprentices with an extension of the apprenticeship incentive to September 2021 (worth up to £3,000) and £7m is being invested into a new so-called flexi-job apprenticeship programme. During the 2021/22 academic year 40,000 16-24-year-olds will be able to undertake work placements and training with £126m of additional funding.
“The increase in apprentice payments will help to strengthen those schemes and the idea of the ‘flexi-job’ apprenticeship is an interesting development,” said Neil Sherreard, director at Beard Construction. “If apprentices are able to move around different employers within the sector they will certainly get a deeper insight into how different firms operate and the broad range of projects we cover as an industry.
“But it does present some questions around who is ultimately responsible for their development as some firms may feel that investment is wasted if they decide to go elsewhere.”
The chancellor added that a future economy requires "the nation to be at the forefront of the next scientific and technological revolutions". To this end, businesses aiming to raise £20m in funding can access a £375m ‘Future Fund: Breakthrough’ that will be invested into enterprises innovating in areas including quantum computing or clean tech.
Sunak told parliament that hiring ‘scientific superstars’ from overseas will be eased with a new unsponsored points-based visa, improved visa processes for scale-ups and entrepreneurs, and simplified bureaucracy for high skilled visa applications.
“We welcome the emphasis on ensuring that the UK is internationally competitive, encouraging business investment and ensuring that international innovators working across universities, start-ups, and innovative businesses, can readily bring their skills and expertise to the UK,” said Prof Sir Jim McDonald FREng, President, Royal Academy of Engineering. “However, our ambitions on net zero, infrastructure and digitalisation are threatened if we do not have the number and diversity of people with engineering and technical skills needed to deliver them.”
Echoing this view, Prof Paul Hardaker, CEO, Institute of Physics said: "While the announcement of a new visa system for science superstars is positive, the government must not overlook the potential of communities in UK regions outside traditional scientific hubs.
"Young people in all corners of the UK are passionate about solving the challenges of improving healthcare, a growing population, decarbonising economies, and ensuring water, food and energy supplies."
Strengthening the public finances
- The rate of Corporation Tax will increase to 25%. Businesses with profits of £50,000 or less, around 70% of actively trading companies, will continue to be taxed at 19% and a taper above £50,000 will be introduced so that only businesses with profits greater than £250,000 will be taxed at the full 25% rate
- Capping the amount of SME payable R&D tax credit that a business can receive in any one year at £20,000 (plus three times the company’s total PAYE and NICs liability)
An investment-led recovery
- Launching a review of Research & Development tax reliefs to make sure the UK remains a competitive location for cutting-edge research
- £4m for a biomass feedstocks programme in the UK to identify ways to increase the production of green energy crops and forest products that can be used for energy.
- Publication of the government’s ‘Build Back Better: our plan for growth’
- Plans for at least £15bn of green gilt issuance in the coming financial year, to help finance critical projects to tackle climate change and other environmental challenges, fund important infrastructure investment, and create green jobs across the UK
- Publication of the prospectus for the £4.8bn UK-wide Levelling Up Fund, providing guidance for local areas on how to submit bids for the first round of funding starting in 21-22
Scotland, Wales and Northern Ireland
- £27m in the Aberdeen Energy Transition Zone and £5m in the Global Underwater Hub in Scotland, the first stage in delivering the North Sea Transition Deal
- £4.8m to support the development of a demonstration hydrogen hub in Holyhead, Anglesey
- Up to £30m for the Global Centre for Rail Excellence in Wales
Source: HM Treasury