Chancellor of the Exchequer Philip Hammond unveiled his spring Budget to parliament with an emphasis on improving the nation's “stubbornly low” productivity.Mr Hammond said the government would tackle the productivity conundrum, which sees Britain trailing behind every other G7 nation, through infrastructure spending and improvements in education and training.

Cannot rest on past achievements

“As we prepare for our future outside the EU we cannot rest on our past achievements,” he told the House of Commons. “We must focus relentlessly on keeping Britain at the cutting edge of the global economy. The deficit is down, but debt is still too high. Employment is up, but productivity remains stubbornly low.”He said the UK economy had “continued to confound the commentators” by delivering “robust growth” – a claim boosted by the Office for Budget Responsibility (OBR) which has upgraded its forecast for growth this year from 1.4 per cent to 2 per cent. In 2018, however, growth is forecast to slow to 1.6 per cent, slightly lower than previously predicted.

A boost for social care funding

Mr Hammond announced a £2 billion boost for social care funding and a £435 million emergency package to help small businesses cope with a new regime of business rates on their premises.And, controversially, he revealed a plan to impose higher tax bills on the self-employed by changing the rate at which they paid National Insurance contributions and by reducing, from £5,000 to £2,000, the amount they can take out of a business in tax-free dividends.“Employed and self-employed alike use our public services in the same way, but they are not paying for them in the same way,” said Mr Hammond. “The lower National Insurance paid by the self-employed is forecast to cost our public finances over £5 billion this year alone. That is not fair to the 85 per cent of workers who are employees.”

Tackling urban congestion

The government's infrastructure proposals – the subject of a £23 billion programme announced in November – included road transport spending of £90 million for the North of England and £23 million for the Midlands plus a £690 million fund from which English councils could compete for projects to tackle urban congestion.The chancellor also outlined plans to help the North Sea oil and gas industry with an expert panel being set up to investigate how tax incentives could be used to help operators keep fields productive for longer.On education, Mr Hammond said new 'T-Level' qualifications would be introduced for technical education while a schools' White Paper would be published to remove barriers to the creation of faith-based and selective free schools, with funding being made available for a further 110 new free schools, in addition to the current commitment to 500.

---

Related news:

• Industrial strategy ‘deeply disappointing on skills’: BEIS committee
• Brexit threatens Pandora’s box for business – CBI chief
• Britain trails in league of female start-ups

---

The chancellor also said the number of hours of training for technical students aged 16 to 19 would be increased by more than 50 per cent, to include a high quality, three-month work placement. There will also be university-style maintenance loans for those undertaking higher level technical qualifications at technology colleges.Funding for research into robotics and a next-generation 5G mobile network were also announced by Mr Hammond, in addition to a commitment for more financial support for the development of driverless cars and electric vehicle batteries.

Investment in robotics

Mr Hammond's spending commitments included £270 million to put the UK “at the forefront” of disruptive technologies including robotics, biotech and driverless vehicle systems; £16 million to create a 5G hub to trial the forthcoming mobile data technology; and funds for 1,000 new PhD and fellowship positions in science, technology, engineering and mathematics subjects.“Too many of our young people are leaving formal education without the skills they need for today's labour market. And too many families are still feeling the squeeze, almost a decade after the crash,” the chancellor said.The OBR report published in conjunction with the Budget indicated that government borrowing this financial year would be £51.7 billion, £16.4 billion lower than the OBR forecast in November mainly due to a better-than-expected economic performance and higher tax take.The report added that achieving an overall surplus remained unrealistic in immediate future, with the UK still expected to borrow £16.8 billion in 2021-22.For related news and features, visit our Enterprise section.Access hundreds of global services and suppliers in our Online Directory  Get access to our free Global Mobility Toolkit

©2024 Re:locate magazine, published by Profile Locations, Spray Hill, Hastings Road, Lamberhurst, Kent TN3 8JB. All rights reserved. This publication (or any part thereof) may not be reproduced in any form without the prior written permission of Profile Locations. Profile Locations accepts no liability for the accuracy of the contents or any opinions expressed herein.