Following Rishi Sunak’s Budget, Simon Jonsson, tax partner and manufacturing expert at KPMG UK, comments: “At a time of great uncertainty and change for industry, the Chancellor has announced a number of positive actions to help manufacturers in the UK.
Most notably, encouraging innovation through the R&D tax credit rising from 12% to 13% and adding relief by increasing the structures and buildings allowances from 2% to 3%. These will be coupled with reforms around employment which will be beneficial for both industry and jobseekers alike.
The much-needed investment around broader public infrastructure and transport will also be welcomed, particularly for those exporting goods, and continuing to prioritise these areas can only help to boost business confidence.
“Whilst the Budget is set against the Chancellor’s assessment of the UK economy in the short term, many are conscious of the potential serious disruption due to COVID-19. This is particularly worrying for manufacturers because of the impact on production capacity and the disruption of global supply chains. So, it’s encouraging to see measures being taken to support health, wellbeing and the UK’s economy at this crucial time.”
Innovation and technology
Commenting on the innovation and technology announcements by the Chancellor, Stewart Room, Head of Data Protection and Cyber Security at DWF, says: "The Government's support for science and technology is welcome and encouraging. Anything that can be done to improve skills is a positive advance and employers will welcome access to new talent. Our hope is that some of the new investment is targeted at growing the UK's position in Privacy Enhancing Technologies. This is a new market opportunity, which will scale and grow rapidly over coming years and the UK is in a great position to take its market share."
UK Steel Director General, Gareth Stace, says: “£600 billion of infrastructure investment is undoubtedly good news. The UK’s historic underinvestment, particularly outside of the south east, has long held key industrial regions of the country back, and it was vital that the Budget addressed this issue. However, it is critical that the Government spends this money strategically, ensuring the largest possible return for taxpayers by maximising the UK content of these major projects.
“UK infrastructure projects are expected to require one million tonnes of steel a year, a figure that will only increase in light of the Chancellor’s investment announcement. The Government could significantly boost the social and economic benefits delivered by these projects by taking a more deliberative approach to steel procurement. Indeed, the two million tonnes of steel projected for HS2 alone would deliver a £1.5 billion boost to the UK economy and safeguard at least 2,000 steel jobs, if UK produced steel is used. The Government must set clear objectives for steel procurement in these major projects, as happens in the United States, and an important first step would be signing the UK Steel Charter.
“Elsewhere in the Budget, it is hugely disappointing that yet again the UK Government has missed an opportunity to tackle some of the fundamental weaknesses of the UK’s industrial environment. Action for steel producers on sky high electricity prices and business rates reform are desperately needed to help establish a sustainable future of the sector, placing it on a clear trajectory towards a prosperous, low carbon future. The steel industry has called for just £50 million in order to help provide competitive electricity prices – if the Government can find £2.5 billion for potholes, then surely it can find £50 million to plug the gap with our nearest competitors.”
Shot in the arm
Lee Lucas, Principal at the Fashion Retail Academy, says: “The Chancellor's announcement that business rates are to be abolished will be a huge shot in the arm to the British high street. Retailers, who have been demanding cuts, will be celebrating today after the much-needed announcement that the Chancellor will be slashing their bills. It will be particularly welcome news for fashion retailers after a tricky few years battling intense pressure from online rivals and, now, the full impact of the coronavirus. The new cuts will help protect the high street, which is at the heart of our economy and hopefully boost business investment in Britain in the aftermath of our exit from the EU. With this boost we hope to see new fashion retailers on the high street this year and a growth for the sector as a whole."
Yiannis Faf, co-founder of WhatWeWant comments: “Digital connectivity is vital to the growth of the UK’s tech sector, not to mention the UK’s economy in general. It will allow regions across the UK to strengthen their local economies and, indeed, inspire a new generation of tech entrepreneurs. After all, the ambitions of budding tech entrepreneurs should not be quashed, simply because they do not want to move to London. Increasing investment is one thing, but we now need a clear plan and schedule for the roll out of gigabit-cable broadband. This is a long-term project, and only by offering a clear implementation strategy will tech businesses and entrepreneurs have the confidence to plan for the future. Given the plethora of economic benefits such an initiative will provide to the wider economy, the Government can’t afford to keep putting digital infrastructure on the backburner. We are globally renowned for our bustling tech scene so let’s ensure the necessary support is being provided.
The future of tech start-ups
Ritam Gandhi, Founder and Director of Studio Graphene, said: “Boxed in by the ensuing Covid-19 public health crisis, the Spring Budget was less an economic policy overhaul in the wake of Brexit, and more a holding operation as the government scrambles to lay out a crisis prevention strategy. But while the announcement might have been less punchy than expected, it was nonetheless reassuring to see that small businesses haven’t been overlooked in the government’s contingency plans; Sunak has offered his commitment to help businesses manage their cash flow as they deal with any financial fallouts experienced from Covid-19.
“Tax commitments that were contained in the Conservative Party’s manifesto have also been given the nod. Entrepreneurs’ Relief, which has been criticised for disproportionately benefitting wealthier entrepreneurs and failing to deliver on its objective – to incentivise people to create new businesses - is set to be revamped. I believe tax breaks are incredibly valuable for business leaders, but we must ensure that they serve to benefit everyday entrepreneurs and not just a select few. The EIS and SEIS should be used as inspiration for policies introduced further down the line.
“There’s no doubt that today’s challenging economic environment has had some influence on the chancellor’s speech. Nonetheless, the government should not forget the important role the UK’s early stage businesses play in driving productivity and leading innovation. The commitment of £130 million of new funding to extend Start-up Loans is a good first step, but it must be the first in a series of measures aimed at providing the support required for start-ups to raise the capital they need to both launch and scale – particularly in these testing conditions.”