Chancellor Philip Hammond has announced the government will be investing an extra £2.3bn in R&D.
In his budget statement Hammond said a new tech business was started every hour in the UK and the “world is on the brink of a technological revolution”.
“For the first time in decades Britain is at the forefront of this revolution,” he said. “We must invest to secure that bright future for Britain.”
Hammond said £500m would be invested in 5G networks, fibre broadband and artificial intelligence, while £1bn of discounted lending would be made available for infrastructure. Some £400,000 will be invested in electric car charging infrastructure and £1.7bn will be set aside in a “transforming cities fund”.
The chancellor said fuel duty would continue to be frozen while vehicle excise duty for older diesel cars, but not vans and lorries, would increase from next April. He said proceeds from this move would fund a new £220m clean air fund to support local air quality plans.
Hammond said the minimum wage would rise from £7.50 to £7.83 from next April, while 600,000 new jobs would be created by 2022. But he said productivity performance “continues to disappoint”.
The chancellor said GDP growth was expected to fall steadily from 1.5% this year to 1.3% in 2019-20 before climbing to 1.6% in 2022. Inflation will be 3% this quarter.
He said debt as a ratio of GDP would peak this year at 86.5% before falling to 79.1% in 2022-23. Borrowing will be £49.9bn this year, dropping to £25.6bn in 2022-23.
Hammond said £700m had been invested in Brexit preparations and a further £3bn had been earmarked for the next two years. “I stand ready to allocate further funds if needed,” he said, adding that negotiations with the EU were in a “critical phase”.
Ben Jackson, chief executive at early payment provider Oxygen Finance, said: “With limited cheer on offer for public sector finance chiefs in today’s budget, they will be facing increased pressure to maximise their limited funds. Procurement is one area with enormous potential to deliver both improved efficiency and bottom line savings.”
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