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Autumn Statement 2014

Autumn Statement 2014

 

Autumn Statement

Overview

In the Autumn Statement this afternoon, Chancellor of the Exchequer George Osborne said

“Today, in the last Autumn Statement of this Parliament, I present a forecast that shows the UK is the fastest growing of any major advanced economy in the world....And while business investment is rising strongly, we know there is still much more to do on productivity. 

So today we boost our skills, our exports, our science and our infrastructure.

So today we move further towards full employment by supporting the businesses that create jobs and apprenticeships. For decades our economy has been too unbalanced, so we do more now to build the Northern Powerhouse”.

Business and the Autumn statement

Today we take steps to back business, support science, and invest in infrastructure. The government has succeeded in making Britain the most entrepreneurial economy in Europe….and today we want to go further.... To make sure our growing smaller businesses have access to credit we will expand the British Business Bank, act to encourage peer-to-peer lending. 

And, with the Governor of the Bank of England, I am extending the Funding for Lending scheme by a further year – and focussing it exclusively on smaller firms. 

We’ll strengthen Entrepreneurs’ Relief and the Social Investment Tax Relief. 

We’ll accept almost all the recommendations of the Office of Tax Simplification to reduce the administrative burden on firms – and I thank them for their work.

Mr Speaker, we also want to help British businesses do more research and development – this is crucial to our productivity.

Today I am increasing the R&D tax credit for small and medium companies to 230% and the credit for large firms to 11%. 

The government has repeatedly helped small businesses deal with the burden of business rates. We do so again today.We will double Small Business Rate Relief for yet another year. It benefits half a million firms, means a third of a million firms pay no rates and we’ll continue to fund it.

I will also continue to cap the inflation-linked increase in business rates at 2%. 

And I am announcing a full review of the structure of business rates, and I urge business groups to engage with us".

Science, Innovation and the Northern Powerhouse

“Mr Speaker, many of the new science investments will be made in the north of England. For one of the great challenges of this country is to create a more balanced national economy – a challenge that has eluded governments for generations.

Our ambition is to build a northern powerhouse as a complement to the strength of our capital city, where we bring together our great cities of the North. Since I set out that ambition less than 6 months ago we have proposed, reported on, and given the green light to the concept of High Speed 3. 

This week we commit billions of pounds to other road and rail improvements across the whole of the North of England.

A few months ago there were no proposals for major new scientific institutions in the North of England. 

Today we commit to a massive, quarter of a billion investment in a new Sir Henry Royce Institute for advanced material science in Manchester, with branches in Leeds, Liverpool and Sheffield...And we back the brilliant work on ageing being conducted at Newcastle University and big data computing at Hartree.

We’re also committing to the industry of the North with investment in new high value manufacturing research....I said I’d put the Northern Powerhouse at the heart of this Autumn Statement, and with billions of investment in science, transport and new civic power in our great northern cities, that’s exactly what we’ve done. 

In Detail....

The Autumn Statement is available online at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/382327/44695_Accessible.pdf

This contains additional detail on the Chancellors proposals including:

Supporting science and innovation

1.143 The government has chosen to prioritise spending on science this Parliament, investing £4.6 billion annually for science and research programmes in each year to 2015-16. The government has also made significant commitments to innovation, committing £1.4 billion public and private investment over 5 years into a new Catapult Network, improving the competitiveness of the R&D tax credit schemes and introducing the patent box to make it easier to protect and profit from new inventions. Recognising the importance of science and innovation in local economic growth, the government also encourages Local Enterprise Partnerships (LEPs) to bring forward proposals for science projects through the Local Growth Fund.

1.144 R&D tax credits are a key element in the government’s commitment to an internationally competitive tax system and in its objective for strong and sustainable private sector-led growth.

The government will increase the rate of the ‘above the line’ credit from 10% to 11% and will increase the rate of the SME scheme from 225% to 230%, from 1 April 2015. To ensure that this support remains effective and well-targeted, the government will restrict qualifying expenditure for R&D tax credits from 1 April 2015 so that the costs of materials incorporated in products that are sold are not eligible and will launch a package of measures to streamline the application process for smaller companies investing in R&D.

1.145 But further action is required in order to ensure the UK continues to have world-class science facilities and remains the best place in the world for research intensive businesses to invest. The government will invest £5.9 billion into the UK’s research infrastructure over 2016-21 – the longest-term commitment to investment in science facilities in any Parliament. This funding will include a £2.9 billion Grand Challenges fund, which will enable the UK to invest in major research facilities of national significance. This strategy commits £0.8 billion of this to major new research facilities and projects including:

• £235 million in the advanced materials Sir Henry Royce Institute

• £113 million in big data at Hartree, Daresbury

• £95 million to take the lead in the next European mission to Mars

• £31 million in new energy security and innovation centres

• £60 million to extend the capabilities of the National Nuclear Users Facility

• £20 million for an innovation centre on ageing, in Newcastle

1.146 The government can also confirm the final details of several further facilities: the £42 million Alan Turing Centre, which will undertake new research into ways of collecting, organising and analysing big data, is to be located in London; and an additional £9 million is being provided by government to increase the prize fund for driverless car testbeds, enabling trials in Bristol, London, Milton Keynes and Coventry from next year.

1.147 An additional £61 million funding will be provided to the High Value Manufacturing Catapult centres to meet increasing demand and provide outreach and technical support to SMEs. The government will also provide an additional £28 million for a Formulation Centre to design new products across numerous sectors by combining different gases, solids or liquids.

1.149 On top of this, the government will invest £3 billion in existing facilities to ensure they remain world class. Over half of this will be subject to competition. An additional £200 million will be allocated through the Research Partnership Investment Fund over the next Parliament by competition, drawing on industry co-funding.

 

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