The Chancellor of the Exchequer delivered his final spring Budget ahead of a general election this autumn – but what did it mean for businesses located across the South East? Charles Hutchings-Lawrence, business development manager at Locate in Kent, gives his assessment of what was said at the despatch box…
Locate in Kent is the inward investment promotion agency for Kent and Medway, a region whose strengths include its proximity to London and the UK’s only direct rail link to Europe, with logistics, life science, creative industries, construction and manufacturing all key areas for growth.
Leading the world
An important part of the government’s role is, of course, to talk up the UK economy to help drive inward investment. That, in turn, helps organisations like Locate in Kent to attract key businesses from key sectors looking for the right location to prosper.
So, hearing the Chancellor describe how well the UK is performing compared to other parts of Europe and the world, as well as some useful slogans and comparisons that are music to the ears for a job like mine.
Regardless of political persuasion, being positive and upbeat about the UK’s potential helps to keep the challenges in perspective and the opportunities in sight.
The UK has grown faster than Germany, France and Italy since 2010, and will continue to grow faster than European three largest economies in the five years ahead, the Chancellor said.
MPs heard how greenfield foreign direct investment has been higher than anywhere else in Europe since 2010, and the third highest in the world after the United States and China. It may be glossing over red tape post-Brexit and other issues, but we needed to hear a positive message.
Surveys by Lloyds and Deloitte show business confidence is returning, the Chancellor said, suggesting attention could now turn to growth now that inflation had ‘turned the corner.’
So, where is the investment coming from and how will that benefit Kent and the broader South East at a time when the focus is on encouraging businesses to locate in other parts of the UK under the government’s Levelling Up agenda?
Investing in the UK
Plans by Nissan to build two new electric car models in the UK is good news for the whole UK, as is Microsoft and Google announcing data centres worth over £3 billion.
Two thirds of all new salary jobs since Levelling Up began in 2019 have been created outside London and the South East. That’s not so good.
This budget continues to deliver on that strategy with the exception of Levelling Up projects in Harlow and Eastbourne.
That said investment in the SaxaVord Spaceport in Shetland may seem a long way off but will provide opportunities for graduates and innovators located at this end of the country.
Locate in Kent continues to work with our partners to argue the case for the strategic needs of this region to be recognised, from major new infrastructure like the Lower Thames Crossing and ensuring the free flow of cargo traffic using the Port of Dover to the growth of key clusters that will provide future high skilled, well-paid jobs.
Together with London, we remain the powerhouse of the UK economy after all.
Life outside the Golden Triangle
We have two science parks in Kent with further clusters that are contributing to a sector that employs some 67,000 people across the South East, the highest number across all regions of the UK.
From listening to the budget, the strength of the life science sector outside London, Oxford and Cambridge – and the significant role it continues to play – might come as a surprise.
The Golden Triangle remains the focus for the government’s ambition to make the UK a world-leading centre for science with £10 million to be invested over the coming year in Cambridge to unlock crucial local transport and health infrastructure. Further funds will be made available in the next spending review.
The Chancellor, meanwhile, announced £242 million pounds of investment to be made in Barking, East London that will see 8,000 homes built and the financial district at Canary Wharf transformed into a new hub for life sciences.
The latter will, of course, indirectly benefit the South East given our connectivity to the capital. Kent Science Park, for example, is benefiting from the network of science parks it can now tap into under the ownership of Pioneer Group. That spirit of collaboration will be key to further raising our own profile. Good ideas are not bound by geography.
Opportunities to come
Outside the US, the Chancellor said the UK has the most respected universities, the biggest financial services sector, and the largest tech ecosystem in Europe.
This country has double the AI startups compared to anywhere in the EU and double the venture capital investments too, with a tech economy now double the size of Germany and three times the size of France. We’re on track, he said, to become the world’s next Silicon Valley.
So, how to unlock those next opportunities and deliver investment? Further reforms were announced to unlock more pension fund capital to support the UK’s next generation of tech entrepreneurs, making it easier for pension funds to invest in UK growth opportunities.
The Chancellor said he wanted the UK to lead the global race in developing cutting-edge nuclear technologies to help deliver a quarter of the nation’s electricity by 2050.
As part of this, MPs heard that Great British Nuclear is beginning the next phase of its small modular reactor selection process. Companies now have until June to submit their initial tender responses.
Up to £120 million, meanwhile, will be allocated to the Green Industries Growth Accelerator to build supply chains for new technology ranging from offshore wind to carbon capture and storage.
In advanced manufacturing, a further £270 million of investment will be made to build the UK’s capabilities in zero-emission vehicle and aviation technologies.
In Kent, as elsewhere in the South East there has been an explosion in TV and film production with Newtown Works in Ashford set to add to a UK-wide capacity for studio space that has doubled, the Chancellor said, in the last three years.
At the current rate of expansion, the UK would be second only to Holywood globally come 2025. We’re already, he said, Europe’s largest film and TV production centre.
To support the sector’s growth the Chancellor announced increases in tax credits and other financial incentives to encourage more business investment, including a 40% relief on gross business rates until 2034.
All of these are clearly opportunities on which Kent, Medway and the wider South East is already contributing towards and will further benefit from in the years ahead, regardless of who is in power the next time the budget comes around.
