British Marine reviews the Autumn Budget

Wednesday’s Autumn Budget was a safety first approach from the Chancellor of the Exchequer. This Budget statement was delivered against the backdrop of a lost Conservative majority in June’s General Election, a lack of perceived progress in the Government’s Brexit negotiations, some high profile Ministerial resignations following sexual harassment claims and an economy which appears to be struggling due to uncertainty caused by Brexit.

The Office for Budget Responsibility’s update and forecast clearly set out the challenges being faced by this Government and the UK as a whole. Borrowing rose by £8bn over the last year, the forecasted growth was revised down to 1.3% by 2019 and productivity growth was revised down by an average of 0.7% a year up to 2023. All of this means the Treasury is operating under tight financial restraints. The Chancellor’s commitment to £25bn of extra spending means he has eliminated almost all the headroom he saved himself last year.

British Marine takes a look at what stood out for the UK marine industry in this Budget and where more work is needed.

The Chancellor’s announcement of action on business rates, R&D tax credits, Brexit planning and an extension and increase of the National Productivity Investment Fund were welcome, as they should help businesses to continue to invest and grow at a time of significant economic uncertainty. A change to the flexibility of the Apprenticeship Levy will hopefully support growth in both skills development and employment too. And the proposed publication of the Industrial Strategy White Paper (expected on Monday 28 November) will hopefully provide some much needed clarity on the Government’s plans for UK industry. But there was little new money to support exports, beyond that given to UK Export Finance, which is disappointing given the boost which is need for the Tradeshow Access Programme, which delivers excellent value for money in supporting UK companies wanting to exhibit at overseas shows.

Business Rates
The Chancellor brought forward plans for rises in business rates to be pegged to CPI (consumer prices index) measure of inflation, not the higher RPI (retail prices index), which equates to a cut of £2.3bn over the next five years. This change will now take effect from 1 April 2018. The Chancellor also increased the frequency with which the Valuation Office Agency revalues non-domestic properties by moving to revaluations every three years following the next revaluation, currently due in 2022.

Investment in Innovation
A further £2.3bn was allocated for investment in research and development (R&D) and there was an increase R&D expenditure credit to 12% (up from 11%). There was significant focus on the UK’s strength in driverless car development and British Marine hopes that the Government will give the same focus to marine autonomous vehicles.

Housing and Planning
While British Marine recognises and supports the need for more housing, this must not be delivered at the expense of the loss of strategic waterfront sites, which the UK marine industry needs to maintain if it is able to grow and develop. British Marine is already working with some of the Local Enterprise Partnerships to focus them on the importance of continued access to water for much of the marine industry.

Skills and Education
A key challenge for Government on skills is making the Apprenticeship Levy fit-for-purpose. By keeping the levy flexibility under review, industries and their businesses can adapt this more to their needs over time. The investment and focus on Maths was welcome and British Marine hopes that apprentices and new T level students will be able to benefit from this.

Marine Environment and Climate Change
British Marine supports the Government’s aim to tackle plastic waste, particularly the harmful effects it has on the marine environment. British Marine, through its “Green Blue” initiative, is already involved in numerous projects aimed at minimising the industry’s impact on the marine environment.

British Marine is also reviewing the Government’s Clean Growth Strategy. It is important that the UK marine industry plays its part in reducing its carbon footprint, but the Government’s focus needs to be maintained on the main culprits of this issue and British Marine will continue to highlight the extremely small impact boats have on this.

Brexit planning
The most important thing for industry is that the UK secures a suitable transition deal that will ensure there is no “cliff edge” moment for UK businesses on departure from the EU. British Marine hopes that the UK Government is able to make significant progress in the forthcoming round of negotiations, so that UK marine businesses have the necessary security, enabling them to plan for the opportunities that will come when the UK sets out on its new global trading future.