“There is likely to be a temporary disruption to our economy,” said chancellor Rishi Sunak in the House of Commons. “On the supply side, up to a fifth of the working population could be off work at any one time and business supply chains are disrupted around the globe. This combination of people being unable to work and businesses being unable to access goods will mean – for a period – our productive capacity will shrink.”
The chancellor pledged measures costing £12bn to tackle the virus and its effects, including the suspension of business rates for many companies, a business interruption loan scheme and refunding statutory sick pay for small businesses.
“The right response is to provide a bridge for businesses to ensure what is a temporary impact on our productive capacity does not become permanent,” he said. “In other words, our response will be temporary, timely and targeted.”
While the economic and business response to Covid-19 has dominated headlines, there were many other relevant points for engineering sectors as the chancellor loosened the purse strings and promised widespread spending. Here are five of the biggest ones.
Over £900m to ‘lead the way’ in nuclear energy and space
The government is investing over £900m so UK companies can “lead the way” in high-potential technology and sectors, including nuclear energy, space and electric vehicles. Money will go towards the commercialisation of nuclear fusion technology and supporting the space innovation fund, which could get innovative new projects into orbit.
The budget also includes a brief mention of at least £800m for a new “high-risk research agency” for ‘blue-sky’ projects.
Increase in R&D tax credits
The rate of R&D expenditure credits for companies will increase from 12% to 13%, the chancellor announced. The move follows calls from manufacturers’ organisation Make UK, which said an increase would help boost innovation. The government will also consult on widening the scheme to cover R&D in data and cloud computing.
Overall, the government plans to increase public R&D investment to £22bn per year by 2024-25, investing in “people, ideas and industries” in sectors including nuclear fusion and electric vehicles.
Investment in Carbon Capture and Storage (CCS)
The budget included a CCS infrastructure fund of at least £800m, to support the establishment of the technology in at least two UK sites – one by the mid-2020s, a second by 2030. It is not yet clear what technology will be installed at which kinds of facilities.
The chancellor also announced support for at least one power station using CCS by 2030. Using consumer subsidies, the government will support the construction of the UK’s first privately-financed gas power station with CCS.
Institutes of Technology to tackle skills gap
Up to eight new ‘Institutes of Technology’ will be created with a £120m fund, aimed at bringing further and higher education providers together with industry to provide high-quality technical education and help close skill gaps in local areas.
A boost for electric cars
Drivers will reportedly never be more than 30 miles (48km) away from a rapid charging station thanks to new infrastructure investment. The budget also provides £532m for consumer incentives for ultra-low emission vehicles and reduces taxes on zero emission vehicles.
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