This afternoon the Chancellor of the Exchequer, Philip Hammond, delivered his 2017 Autumn Budget. He promised to lay the foundations for the future Britain he would like to pass onto the next generation, stating it would be “a hub of enterprise and innovation” and “a beacon of creativity”.
A bright future for innovation
The Chancellor described a positive outlook for the future, speaking about productivity growth through revised business investment, with inflation falling back to target within the next year.
He also promised to raise productivity and wages, and invest in the future of Britain, citing areas of investment such as rail, road and the “biggest investment in science and innovation funding in 40 years.”
The Chancellor pledged to invest an additional £2.3 billion in Research and Development, and increase the R&D tax credit for the RDEC scheme from 11% to 12%, taking the first strides towards the ambition of his industrial strategy to drive R&D investment across the economy to 2.4% of GDP. This is a positive move towards the 3% GDP investment which the EU has recommended to achieve economic growth.
Britain is the world’s 6th largest economy; London is the number one international financial services centre.Philip Hammond, The Chancellor of the Exchequer
We have some of the world’s best companies and a commanding position in a raft of tech and digital industries that will form the backbone of the global economy of the future. Those who underestimate Britain do so at their own peril.
The digital economy
The Chancellor spoke about some ambitious plans to support the digital economy, promising an investment of £500 million in a range of initiatives from artificial intelligence to 5G and full-fibre broadband, as well as introducing a new regulators pioneer fund to further support innovation.
A new tech business is founded in Britain every hour. And I want that to be every half hour.Philip Hammond, The Chancellor of the Exchequer
The Chancellor is also keen to support tech start-ups and electric vehicles through increased charging R&D alongside increased taxes on diesel cars which don’t meet the latest standards.
The Chancellor’s focus on innovation and R&D is rightly placed; in order to build an economy fit for the future, R&D across all sectors needs to be supported and encouraged.
I’m pleased to see the Chancellor discussing the importance of innovation to Britain’s future economy.Mike Price, Director, MPA
Though his comments here were focused on the long-term strategy, it’s great to see a few amendments to initiatives around innovation; the increase in the RDEC scheme tax credit is particularly encouraging, as well as the nearly £3 billion additional funding for the innovation sector.
For more information on how the Autumn Budget might affect your business, read our expert opinion piece written by Lisa Baum, Senior Tax Specialist at MPA.