Today's post pandemic budget failed to deliver the shot in the arm many entrepreneurs were hoping for.
That's the view of our CEO and founder, Toby Harper, who said the Chancellor’s announcements didn’t match the ambition many business owners would have liked to see. Commenting on Rishi Sunak's statement, Toby said:
'No one can dispute the emergency measures adopted by the Chancellor over the past 18 months helped to save hundreds of thousands of businesses - and millions of jobs. But as Britain looks to bounce back from Covid-19, ambitious businesses were today looking for a post-pandemic budget which would provide them with a shot in the arm and help them look forward to the future with hope and optimism. Today’s announcement falls a little bit short of that.
Right now, SMEs across the UK, who will be fundamental to our economic recovery, are facing new pressures from so many angles. The continued fears over a new wave of Covid-19, reduced financial help from the State, soaring energy bills, disrupted supply lines, higher wage costs, and continued labour shortages. They’ve all combined to create a perfect storm which threatens to cast a shadow over their ability to grow. There was little support offered as to how these challenges will be overcome.
The Government has rightly been applauded for putting research and development packages at the heart of its ‘build back better’ agenda. Yet when you dig deeper into the detail, the targets they have set today are far too low.
Let’s not forget this is a country who led the world on developing a Covid vaccine then scaled it up in a way which truly put our global competitors in the shade. However, rather than build on that, the Government has set a target of spending just 2.4% of GDP on supporting research and development by 2027. This sum - £65bn - will still leave the UK distinctly mid-table globally with South Korea, Japan, Germany, and the US all investing more than 3% of GDP on scientific research and development.
An opportunity has been missed not least when you consider how our borrowing commitments are lower than predicted. The Chancellor could have gone further. He decided to slam on the brakes. The announcement of a £1.4 billion Global Britain Investment Fund, £312 million British Business Bank’s start-up loans, and £95m to fund projects through the Office for Life Sciences are also welcome. But again, relatively speaking, these commitments are a drop in the ocean compared to what British businesses need.
I’d particularly like to have seen an even bigger increase in the budget of Innovate UK to fund projects which support SMEs in establishing long-term biotech research and scaling their manufacturing capabilities.
A lot of attention will focus on the chancellor's announcement around reforms to research and development tax reliefs. On the face if it this could be good news for UK businesses. But it needs to be matched by a Visa programme which delivers the expertise required for UK innovators. Making the UK a home for innovation is important, but so too is making it attractive and possible for skilled people to come here to work and live.
It would also have been fantastic to see the British Business Bank provided with extra resources to help small firms scale up. Right now, attracting financial backing is still too often well out of reach for growing businesses who need the capital to make the next step in their journey.
The lion’s share of the new Global Britain Investment Fund, more than £800m, has been earmarked to support investment in the manufacture and supply chain of electric vehicles in north-east England and the Midlands. A further £354m will go towards boosting investment in life sciences manufacturing, including preparing for future pandemics.
Although excellent schemes, most of the direct investment from overseas still hugely favours London and the south-east. It would have been encouraging to see more commitment to grants to support the ‘levelling-up' agenda by encouraging investment outside of these regions. We need to see the resources to drive a 'skills revolution' and investment to the northern regions which, for too long, have been neglected.
A £150m injection to the British Business Bank has been heralded by some as the green light for the development of regional networks of Dragons’ Den-style investors to help make people’s dreams of starting a business a reality. But with record numbers of people now looking to launch their own businesses this pot of money won’t see many get off the starting blocks. And in many ways, that’s the biggest disappointment of today’s Budget.
After a year and half of focusing mainly on survival, businesses were looking to the Chancellor to provide them with the support to grow their businesses and make up for lost time.
The shot in the arm so many were hoping for has not quite been delivered.'