The Chancellor’s Autumn Statement contained a series of positive announcements that should support scaleups. Here we summarise the key points and provide links to the relevant pages in the Autumn Statement Green Book dealing with each of our key themes.
Closing the Talent & Skills Gap
According to the Government’s Autumn Statement Green Book, Research and Development (R&D) will be key to the government’s industrial strategy. To help boost UK productivity, the NPIF will provide the greatest increase in R&D government investment since 1979. Additional funds will be invested in higher education institutions to incentivise collaboration with the tech and business sectors. More details can be found in Chapter 3 of the Autumn Statement Green Book here.
Closing the Access to Markets Gap
The Government has pledged additional support to UK Export Finance (UKEF) with the aim to ensure that no viable UK export fail for lack of finance or insurance from the private sector. Supporting trade policy as Britain exits the EU is naturally a top priority; up to £412 million will be invested in protecting Britain’s trade interests over the course of this Parliament. More details can be found in the Autumn Statement Green Book here.
Closing the Finance Gap
The Government has introduced a number of financial measures, most notably the additional £400m from the British Business Bank into VC funds with the aim to unlock £1bn in finance in high growth businesses and the new National Productivity Investment Fund, which will focus on innovation and economic infrastructure through 2022. More details can be found in Chapter 3 of the Autumn Statement Green Book here.
Closing the Infrastructure Gap
The Government has called on the National Infrastructure Commission to prepare itself to make future recommendations for infrastructure assessments and investment. More details can be found in the Prime Minister’s Speech revealing the UK’s business and economic strategy.
Summary of key announcements for scaleups in the Autumn Statement
New National Productivity Investment Fund to add £23bn in high value investment to be focused on innovation and economic infrastructure over the next 5 years to 2022, with £2bn per year by 2020 to be allocated to R&D funding
Review of the tax environment for R&D to look at ways to build on the introduction of the ‘above the line’ R&D tax credit to make the UK an even more competitive place to do R&D.
Private investment in new high growth businesses with plans to scale up will be encouraged through £400m from the British Business Bank into VC funds with the aim to unlock £1bn in finance.
UK Export Finance to have capacity doubled to provide increased support to exporters including increasing its risk coverage
Patient Capital Review planned to identify barriers to access long-term finance for growth companies led by HM Treasury with support from an advisory panel lead by Sir Damon Buffini.
£13m will be invested into implementing Sir Charlie Mayfield’s (Chair of the John Lewis Partnership) productivity business initiative. The Productivity Leadership Group that aims to improve management skills across British businesses.
The DIT will provide £500,000 a year for FinTech specialists and the government has commissioned an annual ‘State of UK FinTech’ report on key metrics for investors. A network of regional FinTech envoys will be launched.
Business and corporation tax: government recommits to the business tax road map which sets out plans for major business taxes to 2020 and beyond, including cutting the rate of corporation tax to 17% by 2020 and reducing the burden of business rates by £6.7bn over the next five years. Small businesses in rural areas are given a tax break worth up to £2,900 per year by doubling the Rural Rate Relief to 100% from 1 April 2017
The National Living Wage and the NFI national Minimum Wage will increase from April 2017.
The Government will invest over £1bn by 2020-2021 in digital infrastructure aimed to boost private investment in fibre networks and support the market to continue 5G trials and roll out.
From April 100% business rates relief will be provided for a 5 year period on new fibre infrastructure
LEPS and English regions
Allocation of £1.8bn from the Local Growth Fund to local authorities and local enterprise partnerships (LEPs) in the English regions. Overall numbers are as follows (a detailed breakdown will be announced to individual LEPs)
◦ £556m to LEPs in North of England
◦ £392m to LEPs in the Midlands
◦ £151m to LEPs in the East of England
◦ £492m to London and the South East
◦ £191m to LEPs in the South West.
Government will grant new borrowing powers to support new mayoral combined authorities in England.
Northern Powerhouse Strategy will be published
Discussions will be continued with the West Midlands and London on future devolution deals.
Spending on infrastructure
The National Infrastructure Commission to make recommendations on the future infrastructure needs of the country assuming the Government will invest 1-1.2% of GDP every year from 2020 in economic infrastructure.
Backing of interim recommendations on Oxford Cambridge Growth Corridor with £110m funding for east-west rail
The Chancellor committed to delivering the Oxford to Cambridge Express Way.
The UK Guarantees Scheme will be extended to at least 2026 to continue to deliver Treasury-backed infrastructure bonds and loans.