Clearly, with predictions of a slowdown in UK growth and potential headwinds in the international economy, this was always going to be a difficult Budget for the Chancellor. It appears that he has avoided loading significant costs or policy burdens on business and the reduction in Corporation Tax is going to get a broad welcome from business, although in practice it’s more of a headline grabber, than a significant boost to the economy.
There was some good news on infrastructure investment, particularly in the North of England (£300 million for improving transportation links there and the green light for HS3) and on Crossrail 2, which is all very positive.
And tucked in amongst the big announcements on education and academies was the launch of a welcome review of how to improve the study of maths for 16-18 year olds. Siemens has a major programme to promote STEM education, the Curiosity Project, which we are passionate about in supporting this important topic area.
Overall, however, I would have liked to have seen some more ideas on productivity and for boosting exports.
The OBR has identified our relative poor productivity performance as one of the largest drags on UK’s economy.
A single budget will of course never find a ‘silver bullet’ for such a complex issue, but an obvious opportunity missed was on business rates. Companies like Siemens had argued that in their review the government should have taken steps to exempt productivity boosting plant and machinery from rateable values, so I am disappointed not to see this happen. There were also no further steps to enhance either the UK’s capital allowance regime or R&D tax credits.
I guess we’ll have to work closer with Government to help deliver more support for innovation in its forthcoming National Innovation Plan.
And there is the work of the Productivity Leadership Group, led by Sir Charlie Mayfield, which I participate in, and will make proposals to government in the Summer
So, we still have opportunities to influence and develop policy and support mechanisms that brings all of the elements together into a more coherent Industrial Strategy. This budget alone hasn’t provided very much more concrete action in that direction.