Spring Budget sets out growth strategy
Image copyright Shutterstock
As economic growth increases living standards, supports higher paid jobs and strengthens the public finances, the Chancellor’s strategy outlined in his Spring Budget aims to deliver long term sustainable growth, focusing on four key priorities, namely employment, education, enterprise and everywhere, to unleash the UK's growth potential.
These measures are designed to deliver more jobs, better services and more opportunities for local people.
A devolution package and funding for community projects in the Budget will help further Government ambitions to spread opportunity more equally. The measures build on its place-based approach, as set out in the Government’s Levelling Up White Paper, to ensure targeted measures which best suit the unique economy, geography and expertise of each area.
The Government will be working closely with local leaders in key areas to help attract investment and unleash economic potential and has provided R&D and investment support for several growth sectors.
Commenting on the Chancellor's Spring Budget, Kevin Craven ADS Chief Executive said: “ADS welcomes the Chancellor's drive towards a much needed and timely industrial strategy for the UK, aimed at delivering sustainable growth, whilst supporting business investment.
“Full expensing for three years is welcomed and we will look for this to be extended at the next Spending Review. We also welcome the increased support for SMEs undertaking vital R&D and are keen to see the outputs of the Treasury’s review on a single scheme, which must provide comprehensive support for businesses of all sizes to ensure the UK remains an attractive place for investment.
“The announcement of Returnerships should help fill current vacancies and support our specialised engineering workforce while preparing for the jobs of the future. Additional flexibility around the Apprenticeship Levy is required to provide greater opportunities for addressing our workforce shortages.
“Finally, industry looks forward to understanding the impact of additional defence spending plans and further attention on future energy support for businesses is needed. ADS continues to represent our sectors’ needs to Government.”
Karen Dee, Chief Executive of the Airport Operators Association said: “We would have liked to have seen moves to allow airports to establish duty-free shopping stores for arriving passengers. UK Airports are still operating at a competitive disadvantage to their European counterparts, where most of the spending on duty-free allowances currently takes place. The Government should follow the lead of countries like Norway and Switzerland, where airports have been able to provide opportunities for arriving passengers to take advantage of duty-free shopping.
“It is also disappointing that no additional support for airspace modernisation and Sustainable Aviation Fuels (SAF) was announced by the Chancellor. Recovering from the effects of the pandemic and reducing the sector’s carbon emissions are the two key challenges facing aviation. Both projects would provide enormous economic and environmental benefits, with airspace modernisation allowing for more efficient routes and reduced stacking, while establishing the UK as a world leader in SAF would lead to the creation of over 20,000 jobs and almost £3 billion in gross value added to the economy.
“We are pleased, however, that the Government has acted to change pension allowances, something the AOA called for in its Budget submission, to help relieve the recruitment and retention challenge facing the aviation sector. These measures will help attract people who left the jobs market due to the pandemic back to careers in critical roles at airports like in the fire and rescue services, air traffic control and air traffic engineering.”
ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., said: "Perhaps the most interesting news for manufacturers and other businesses was the (admittedly widely trailed) announcement of 12 new Enterprise Zones. These could create new Docklands-style developments across the UK, according to the Chancellor. They will be introduced in the West Midlands, Greater Manchester, the North East, South Yorkshire, West Yorkshire, East Midlands, Teesside and Liverpool, as well as Scotland, Wales and Northern Ireland. Each will be funded by £80 million over the next five years. The Enterprise Zones are expected to gain tax relief and business rates help, and bring together regional governments and local universities to boost R&D projects.
"The really bad news for businesses was that the whopping climb in corporation tax, up from 19% to 25%, will go ahead as planned. However, its impact could be slightly offset by some other tax measures. This particularly applies to those companies investing in R&D, IT equipment, etc. Under Hunt’s 'Full Expensing' plans, every pound a company spends on new IT equipment and new plants and machinery can immediately be deducted in full from taxable profits. Smaller businesses will also have an increased Annual Investment Allowance of up to £1 million, meaning 99% of SME companies will be able to deduct the full value of all their investment from taxable profits.
"Transport and distribution companies could benefit from a new £8.8 billion pot for sustainable transport initiatives across the regions. Many working drivers will be delighted by the news that there will be an extra £200 million spent on filling in the UK’s thousands of potholes. The announcement that fuel duty will remain frozen and the 5p reduction will be maintained for another year will also be welcomed by many owner-drivers.
"Many transport and supply-chain companies wanted to see considerably stronger greener measures. While there were few initiatives to get Britain’s motorists switching to electric power, news of a new carbon capture scheme, backed up with £20 billion in support, will be greatly welcomed. This could cut around 20-30m tonnes of CO2 per year by 2030."
Paul Fakley, Engagement Director at British Safety Council, said: “Well over a million people in the UK say they would like to work but are currently ‘economically inactive’, which is why actions taken to reduce barriers which prevent many people staying in or returning to work are welcome. This includes better support and incentives for disabled people, those with long-term health conditions, the over 50s and parents of young children.
“We know the biggest cause of ill-health or absence from work is stress or poor mental health, followed by muscular-skeletal disorders, so the extra money and support announced here is positive, as is funding to help prevent suicide. There was also some extra funding announced for SMEs to provide occupational health support.
“The cost of living will continue to have a big impact on people’s wellbeing, despite the projected fall in inflation this year. Some employers can’t match this with pay increases, but there is much they can still do to support their staff, through financial awareness, flexible working and other incentives like vouchers and rewards.
“We know that good work is good for our mental and physical health and employers have a vital role in improving the wellbeing of their staff both in and outside of work, which is why we are calling on the Government to go further and develop a National Wellbeing Strategy.”
With regard to advanced manufacturing, further policy announcements will follow for these sectors once the recommendations from their subsequent reviews have been considered.
To see the full Spring Budget click here:
www.gov.uk/government/publications/spring-budget-2023
