There wasn’t much to smile about. George Osborne even had the grace not to sport a big cheesy grin when he hoisted the red Budget Box for the traditional 11 Downing Street photocall. The grim-faced chancellor then spent well over an hour delivering a grim emergency budget.
But the rationale for the budget was to turn Britain’s economy around, from the disaster of the banking crisis and the structural deficit, to an industry-driven recovery and a surplus within five years. So, among the benefit cuts and tax raises, were there any glimmers of light for engineering and manufacturing? Were there even slightly paler patches within the gloom that might show where a glimmer could form?
From what we can see, you’d have to look pretty hard. The government will announce its plans for investment in science and engineering R&D in its comprehensive spending review (CSR) in the autumn. Some wags are already saying that CSR now stands for comprehensive spending reduction.
A group of manufacturing representatives, including the heads of UK R&D for Airbus, Lockheed Martin and the major drugs producers, wrote to The Times last week calling for a long-term strategy of investment in education and public sector research. Science’s latest public advocate, Prof Brian Cox, is making the point that private money follows public money when it comes to science R&D. Science minister David Willets told journalists a few weeks ago that he’d be making the case for investment at Cabinet meetings. What we don’t know is whether the Treasury will listen.
One area where industry can look for comfort is R&D tax credits. Previously, Osborne had suggested that cuts in corporation tax could be funded by removing tax credits, simplifying the tax system; James Dyson, in his report to the Tory party, suggested refocusing R&D credits on smaller and more research-oriented businesses. Osborne appears to have listened; he also supported a scheme to make it easier for small businesses to borrow money without assets to act as security. It’s not much, but it’s something.
The CSR is three months off, and any companies looking to invest can probably wait for that to gauge the UK’s fitness as a site to invest. But the cancellation of the government loan to Sheffield Forgemasters continues to leave a nasty taste; the signal this sent to industry was not good. Britain needs to be seen as a good place to do research and a good place to make things; industry is the only thing that’s going to lift the economy back into growth. Let’s hope that Willets and the spokesmen for innovation-led industry make their voices heard in the committee rooms.