This budget contains some very welcome investments in housing and skills which are both key constraints on economic growth across the UK. The Chancellor has also announced new funding for the kinds of things that underpin productivity and innovation in firms of all sizes, across all industry sectors. This includes R&D (with an additional £2.3billion and an increase in the R&D tax credit to 12 percent), capital investment for automation, digital infrastructure and other ‘enabling technologies’ which will help improve national competitive advantage and our ability to export. These initiatives also link to the National Productivity Investment Fund which has been extended by a year and expanded to £31billion. These are all welcome developments in the context of the UK Industrial Strategy, Brexit and the need to improve the economy.
I am more disappointed in the announcements around regional funding, given there is also a real need to rebalance an economy that is over-reliant on London and the South-East. Inclusive growth is necessary for social and political as well as economic reasons. This should be driven by greater levels of investment and a set of policies that enable regions to improve their competitiveness and create more high-value, better-paid jobs. The Chancellor did announce a £1.7billion Transforming Cities Fund, to be shared across the metro mayor areas and beyond, and the West Midlands has been awarded £250million for transport connectivity. But these amounts are relatively small, when we consider, for example, that almost £15billion has been committed to the Elizabeth Line as part of the Cross-Rail programme of transport improvements for London.