Chancellor Rishi Sunak’s Budget presentation on 11 March was dominated by the rapidly developing Coronavirus situation, which he called ‘the key challenge facing this country today’.
One-off measures were announced, mostly to support SMEs (especially those in retail and leisure).
These included the Coronavirus Business Interruption Scheme — a ‘cheaper version’ of the Enterprise Finance Guarantee, through which the Government underwrites loans from commercial providers — and an extension of Time to Pay; and while there was a huge increase in public spending commitments, details of these and other measures will come after a CSR is completed in July.
The Office of Budget Responsibility’s forecasts (
www.obr.uk), published along with the Budget, were made before the impact of Coronavirus became known and will be subject to significant revision, but the Budget announcements included the following: the Bank of England base lending rate cut to 0.25%; an additional £10 million for England’s 38 Growth Hubs ‘to provide high-quality business advice and guidance’; £13 million for the British Library’s network of Business and Intellectual Property Centres, giving free access to advice, market intelligence, intellectual property workshops and one-to-one coaching; and £5 million for the ‘Be the Business’ scheme.
Meanwhile, the Reforming Regulation Initiative was launched, a three-month consultation to help government ensure that regulation is sensible and proportionate.
Furthermore, the Northern Powerhouse, Midlands Engine and Western Gateway will have champions at ‘key overseas posts’.
Mr Sunak said the Government will ensure that sufficient funding is made available in 2020-21 to support an increase in the number of high-quality apprenticeships in small and medium-size businesses; it will also provide an additional £7 million to support 11 maths schools in England.
With regard to research, he said that at least £800 million is to be spent on a new ‘blue-skies funding agency’, modelled on the Advanced Projects Research Agency (ARPA) in the USA, and that R&D Expenditure Credit has been raised from 12% to 13% (this will be worth some £1 billion over four years).
In its summary of the Budget, the Government said that by the end of the Parliament,
public-sector net investment will be triple the average over the last 40 years in real terms.
“In total, around £640 billion of gross capital investment will be provided for roads, railways, communications, schools, hospitals and power networks across the UK by 2024-25.”
The Government will publish a National Infrastructure Strategy later in the spring.
UK Steel director general Gareth Stace said: “£600 billion of infrastructure investment is undoubtedly good news.
"The UK’s historic under-investment — particularly outside 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.
"Elsewhere in the Budget, it is hugely disappointing that — yet again — the 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 is desperately needed to help establish a sustainable future for the sector.”
Stephen Phipson, chief executive of Make UK (the manufacturers’ organisation), said: “Aside from the overwhelming immediate priority [of Coronavirus], the Chancellor has also recognised the need to ‘turbo-charge’ investment in long-term measures that will boost the productive potential of the economy and support ‘green’ growth.
"For too long, the UK’s infra-structure outside the South East has played ‘second fiddle’ and industry will welcome the resources devoted to improving links across the UK — in particular, the strategic road network.
"In a world that is rapidly becoming digital, the UK needs to stay at the forefront of research and innovation. Today’s measures to boost R&D will be applauded by industry and will help the UK lead in the technologies of the future.”
On measures to boost further education, Tim Thomas — director of Employment and Skills Policy at Make UK — said: “Extra capital funding for the entire FE college estate is both welcome and needed.
“With T-levels around the corner for manufacturers, funding for new capital equipment — often a roadblock to greater technical training — cannot come too soon.
"The announcement of more funding for maths teachers for 16- to 19-year-olds will generate a better-equipped workforce with the STEM skills to address the skills shortage that manufacturers face.”