Chancellor announces ‘Budget for growth’, harnessing British ingenuity to ‘make us a science and technology superpower’.
Chancellor Jeremy Hunt announced what he claimed to be ‘a Budget for growth’ in today’s Spring Budget statement, laying out plans to ‘harness British ingenuity to make us a science and technology superpower’.
Hunt stated his ambition to make the UK ‘the best place in Europe for companies to locate, invest and grow’, with measures that will ‘strengthen our technology and life science sectors, invest in energy security, and [...] cut corporation tax by £9bn a year to give us the best investment incentives of any advanced economy.’
Here are the key announcements and pledges made regarding science and industry announced in today’s budget:
Hunt announced the delivery of 12 new investment zones, noting that ‘In England we’ve identified the following areas as having the potential to host one – West Midlands, Greater Manchester, the North East, South Yorkshire, West Yorkshire, East Midlands, Teesside and once again Liverpool. There will also be at least one in each of Scotland, Wales and Northern Ireland.’
To qualify for £80m of support ‘for a range of interventions including skills, infrastructure, tax relief and business rates retention’, each area will need to successfully identify where they can offer ‘A bold and imaginative partnership between local government and the university or research institute in a way that catalyses new innovation clusters’.
R&D tax relief
‘If a qualifying small or medium sized business spends 40% or more of their total expenditure on R&D, they’ll be able to claim a credit worth £27 for every £100 they spend,’ Hunt pledged. ‘That means an eligible cancer drug company spending £2m on R&D will receive over £500,000 to help them develop breakthrough treatments. It’s a £1.8bn package of support helping 20,000 cutting edge companies who – day by day – are turning Britain into a science superpower.’
We're introducing additional tax support to help research & development intensive SMEs.— HM Treasury (@hmtreasury) March 15, 2023
For every £100 spent on R&D, eligible companies will be able to claim £27 back, helping them to invest in more R&D and grow for the future. pic.twitter.com/nnhmYyxEj3
Carbon capture investment
Hunt explained, ‘I want to develop another plank of our green economy – carbon capture usage [sic] and storage [...] allocating up to £20bn of support for the early development of CCUS, starting with projects from our east coast to Merseyside to north Wales, paving the way for CCUS everywhere across the UK as we approach 2050.’
The chancellor claimed the investment will support up to 50,000 jobs, attract private sector investment, and help capture 20-30m tonnes of CO2 per year by 2030.’
The nuclear option
Despite the claim that electricity generated in the UK from renewables has increased to almost 40%, Hunt noted that ‘because the wind doesn’t always blow and the sun doesn’t always shine [...] we will need another critical source of cheap and reliable energy.’
‘To encourage private sector investment into our nuclear programme, I today confirm that, subject to consultation, nuclear power will be classed as environmentally sustainable in our green taxonomy. That will give it access to the same investment incentives as renewable energy and alongside that will come more public investment.’
“Nuclear power will be classed as environmentally sustainable,” the Chancellor says, giving it access to same investment incentives as renewables— BBC News (UK) (@BBCNews) March 15, 2023
Jeremy Hunt also launches "Great British Nuclear" aimed at bringing down costs of producing nuclear powerhttps://t.co/SGJJtCPJXF pic.twitter.com/s0D2V8SrS1
Hunt announced the launch of ‘Great British Nuclear’, which he claimed ‘will bring down costs and provide opportunities across the nuclear supply chain to help provide one quarter of our electricity by 2050’.
Additionally, the chancellor announced the launch of a competition for small modular reactors, to be completed by the end of this year and – if demonstrated as viable – the government will co-fund the new technology.
Referring to the MHRA as ‘one of the most respected drugs regulators in the world’, Hunt announced that from 2024 it will move to a different model ‘which will allow rapid, often near-automatic signoff for medicines and technologies already approved by trusted regulators in other parts of the world such as the US, Europe and Japan’.
‘At the same time they will set up a swift new approval process for the most cutting-edge medicines and devices to ensure the UK becomes a global centre for their development. And with an extra £10m of funding over the next two years, they will put in place the quickest, simplest regulatory approval in the world for companies seeking rapid market access.’
Hunt said the change ‘will make the UK an even more exciting place to invest, using our Brexit freedoms and speeding up access for NHS patients to the very newest drugs’.
Artificial Intelligence and a quantum economy
Finally, the chancellor announced he had accepted all nine recommendations made by Sir Patrick Vallance in his review of AI. ‘That means that I can report to the house that we will launch an AI sandbox to try out new faster approaches to help innovators get cutting edge products to market.’
‘We’ll work at pace with the Intellectual Property Office to provide clarity on IP rules so that generative AI companies can access the material they need. And we’ll ask Sir Patrick’s successor, Dame Angela McLean, to report before the summer on options around the growth duty for regulators.
A new national #AI award called the Manchester Prize is named after our invention of the Baby – the world's first stored program computer.— The University of Manchester (@OfficialUoM) March 15, 2023
Learn more about our AI research: @UoMSciEng @csmcr https://t.co/reaxJ4rFLP
And the Baby: https://t.co/9NRNUjQkgv https://t.co/Trm4O0gRol
‘Because AI needs computing horsepower, I today commit around £900m of funding to implement the recommendations of the independent Future of Compute review for an exascale computer. The power needed by AI’s complex algorithms can also be provided by quantum computing, so today we’ll publish a quantum strategy which will set out our vision to be a world leading quantum enabled economy by 2033, with a research and innovation programme totally £2.5bn.’
In a bid to encourage the best AI research to happen in the UK, Hunt announced the launch of the Manchester Prize – an award of £1m every year for the next 10 years to the person or team that does the most groundbreaking British AI research.