The Budget: Chancellor sets strategy to deliver a stronger economy

Land October 27, 2021

The Chancellor Rishi Sunak has delivered his Budget as the Government set out its strategy to deliver a stronger economy.

Making his second Budget statement to Parliament this year, Mr Sunak’s spending plans were billed as preparing the country for a post-Covid economy.

The Chancellor told Parliament: “I want this to be a society that rewards energy, ingenuity and inventiveness.”

The government had already laid out its ambitions to become a global science superpower and the Chancellor provided an update on investment in this strategy in his Budget statement.

He confirmed to the House that he will maintain the target to increase research and development (R&D) investment to £22 billion but pushed the target date out to 2026-27 in order to deliver on other priorities.

Mr Sunak said that this investment was in addition to the cost of R&D tax reliefs and represented a cash increase of 50% – the fastest increase ever.

The Chancellor said: “We need to do what the people of this country have always done: invent, discover, and create the ideas and technologies that will change the world. So, we will also invest more in innovation.

“The UK is already a world-leader. With less than 1% of the world’s population, we have 4 of the world’s top 20 universities;14% of the world’s most impactful research; and the second most Nobel Laureates. We want to go further.”

Mr Sunak said that businesses ambitions on this front would be enhanced by new immigration policies, citing the Scale-UP Visa system, which is envisioned to simplify the process to attract and recruit highly-skilled individuals from the science and technology sectors from around the world.

Science, technology and innovation forms a fundamental part of the Ministry of Defence’s ongoing strategy, as it looks to harness innovation and diversity in its supply chain.

For the defence industry, there were no specific announcements on government investment within the Chancellor’s address, with much of the government’s spending plans already being outlined in the Spending Review last November.

The Review announced the biggest increase in defence spending in over 30 years – a £16.5 billion increase above the Government’s manifesto defence investment commitment over four years.

Overall, this is projected to be a cash increase of £24.1 billion over four years compared to last year’s budget.