Pre-Brexit budget was big on giveaways, short on vision

The Chancellor was able to provide some carefully targeted giveaways to support housing, health, skills and infrastructure while still keeping the budget deficit on a downward path.

However, the investments in the leadership and the capabilities of our great city regions was spot on. This is an investment that can pay off for the future.

For this region, we’ve seen commitments to the ‘Midlands Engine’, a second devolution deal and the launch of a £1.7 billion Transforming Cities Fund to improve transport links and promote local growth within city regions.

That includes £250 million for better transport in the West Midlands and a manufacturing zone to be piloted in the East Midlands to drive business investment and productivity. These are all welcome interventions.

Cities in the Midlands, particularly Birmingham, are among the fastest improving cities in this year’s PwC Good Growth for Cities Index driven by jobs growth, highlighting the increased pace of recovery in major urban centres in the UK outside the South of England.

A key theme in the budget was technology and skills investments and it was encouraging to see the government investing in emerging technology. Artificial intelligence is one of the biggest commercial opportunities of our time and could produce extra spending power per household of up to £2,300 a year by 2030, equivalent to a 10 per cent boost to UK GDP.

The focus on investment in skills and lifelong learning comes at a vital time to broaden access to the high quality and high paid jobs of the future. And degree apprenticeships, such as the programme we have launched with the University of Birmingham, are a good example of business and universities collaborating to ensure young people are equipped with the right skills.

On business rate measures, the Chancellor has clearly listened to the concerns of business and brought forward the switch from RPI to CPI when calculating annual business rates rises. This will save business an estimated £2.3 billion over the next four years. However, this will still mean an increased rate bill of 2.8 per cent for many, while larger businesses still receiving Transitional Relief could see April 2018 increases as high as 35 per cent.

The commitment to move to three yearly revaluations will make sure business rates stay more closely aligned with current rental values, which drive rating valuations.

On housing, the commitments of £44 billion in capital funding and loans to build 300,000 homes each year are welcome and show the government recognises that housing and rising homelessness are the most important non-Brexit issue facing the UK.

Building on the recent GovTech announcement, it’s clear that the Chancellor is paving the way for the UK to be a frontrunner in 4IR and connected automotive technology. This is no longer a futuristic long shot, but an industrial inevitability.

Being at the forefront of this research, development and implementation will undoubtedly secure UK automotive jobs from commercial labs to the factory floor and across the wider supply chain, and the industry will welcome the promise of a £2.3 billion R&D investment fund.

On stamp duty, while, in theory, 95 per cent of first time buyers are winners from the removal of stamp duty on first time purchases, home ownership will only become a reality for generation rent if more affordable housing is unlocked in the system. This can only be achieved by a complete review of the whole housing system.

While the budget speech contained no shocks, with so many giveaways there will inevitably be losers. Businesses were looking for a vision beyond the here and now and I’m not sure they got it. Matthew Hammond is Senior Office Partner for PwC in the

Midlands