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- November 22nd, 2017 Posted in Uncategorised

22 November 2017


  • Budget framed around a vision that the government is “building an economy fit for the future”
  • Growth forecasts substantially downgraded since the Spring Budget, with 2017 down to 1.5% from 2.0%, 2018 down to 1.4% from 1.6%, 2019 down to 1.3% from 1.7% and 2020 down to 1.3% from 1.9%
  • Public gestures included centrepiece stamp duty relief for first time buyers, changes to universal credit



  • Additional £3 billion allocated to “prepare effectively for Brexit” – on top of previously announced £700 million of funding to date
  • £1.5bn of the £3bn funding will be allocated to Departments to spend in 2018/19, and the final £1.5bn agreed for 2019/20 later next year as Brexit negotiations progress

Industrial Strategy

  • Additional £7 billion for the National Productivity Investment Fund (£31 billion in total) for an extra year into 2022-23
  • ADS expect Government’s Industrial Strategy White paper will be published on Monday 27 November 2017


  • Increase in R&D expenditure credit from 11% to 12% from 01 January 2018
  • PM announced Government would work with industry to boost spending on R&D to 2.4% of GDP by 2027, with a further £2.3bn invested in R&D in 2021-22

Innovation and technology

  • Government will invest £500m in Artificial Intelligence, Broadband, 5G and geospatial data (including £40m a year for next two years)
  • Government will invest £21m over the next four years to become a ‘Tech Nation’, supporting regional tech companies and start-ups and create a Centre for Data Ethics

Business rates

  • £2.3 billion of funding for business rates changes over the next five years
  • Bringing forward by two years to 1 April 2018 the planned switch in business rates indexation from RPI to the main measure of inflation (currently CPI)

Skills and education

  • Formal skills partnership announced between the government, CBI and TUC to develop a National Retraining Scheme, which will oversee targeted action in sectors with skills shortages, initially focussing on construction and digital skills.
  • £173.5 million funding for mathematics with new funding for schools and training for maths teachers
  • £84 million support for computer science to ensure every secondary school has a qualified computer science GCSE teacher
  • £20 million support for schools to prepare for changes to T levels announced at Spring Budget 2017



On the Budget, ADS Chief Executive Paul Everitt said:

“Stagnating productivity is a national challenge. Addressing it is crucial to making sure UK companies can compete on the world stage in the years ahead. Businesses will welcome the Chancellor’s measures to incentivise private sector investment in R&D and minimise increases in business rates. However, Government must take decisive action to support supply chain productivity. Investment in productivity improvement programmes will support UK manufacturers to meet international demand for our high quality products and provide the best response to Brexit uncertainties.”


The real story of the Chancellor’s Autumn Budget was the significant downgrades to both productivity and GDP growth by the independent fiscal watchdog the Office of Budget Responsibility (OBR). For the past few Budgets, the OBR have persistently – and incorrectly – assumed that productivity growth would return to its pre-crisis level (see below). This time, however, the OBR have had to admit that productivity growth over the next few years is likely to be significantly lower than its pre-crises trend. As the OBR says, “the persistence of weak productivity growth does not bode well for the UK’s growth potential in the years ahead.”

What is even more worrying was that the Chancellor announced little, if anything, in the Budget that would help to boost productivity now. There were welcome, but modest, measures on R&D tax credits, business rates and technology investment. But the £2.3bn in additional R&D spending announced this week does not kick in until 2021/22. For industry, the biggest disappointment was the Chancellor did not announce funding for a productivity improvement programme for aerospace, automotive, defence, rail and nuclear sectors.


Please see the attached briefing for data on the public finances.


Further information is available by clicking on the links below: