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Spring Statement 2019: A cloud of uncertainty

by AprilSix Proof

Photo by Heidi Sandstrom

 

Chancellor of the Exchequer Phillip Hammond has presented his Spring Statement to Parliament with knife crime, tech regulation and, of course, Brexit taking the centre stage.

The headline GDP figures look less than impressive. The 2019 growth forecast has been cut to 1.2% from 1.6% and uncertainty around Brexit; especially after the latest defeat in the House of Commons, remains. This, however, did not stop Mr Hammond from setting out further investments in infrastructure, technology, housing, skills, and clean growth.

In an apparent win for science and innovation, the Chancellor stated that“research institutes and innovating businesses will benefit from an exemption for PhD-level occupations from the cap on high-skilled visas from this autumn. Overseas research activity will also count as residence in the UK for the purpose of applying for settlement, meaning researchers will no longer be unfairly penalised for time spent overseas conducting vital fieldwork.” This will calm universities and research institutes who have long called for such an exemption.

The Chancellor certainly took a firmer tone on Brexit however. He went from only mentioning Brexit once in the Budget to essentially, caveating every forecast with “so long as there is a Brexit deal” by the close of his statement. It’s clear he is worried about the potential impact of a ‘no-deal’ scenario. As one of the cabinet’s most vocal Remainers, it should come as no surprise that he is urging his colleagues to support the PM’s deal. If not, they risk plunging the otherwise steady economy into turmoil.

In other news, he confirmed that the Government will hold a spending review, concluding alongside the Budget. This will set departmental budgets, including three-year budgets for resource spending on things such as social care, but again with the caveat: “if a Brexit deal is agreed.”

Given the indecision over Brexit and the likely prospect of Article 50 being extended, the ‘can-kicking’ looks set to continue.

Highlights from a science, technology and innovation perspective include:

  • Welcomed the Furman review, an independent review of competition in the digital economy, which has found that tech giants have become increasingly dominant. The Chancellor announced that the government will respond later in the year to the review’s calls to update competition rules for the digital age – to open the market up and increase choice and innovation for consumers.
  • Has written to the Competition and Markets Authority (CMA) asking them to carry out a market study of the digital advertising market as soon as is possible. This was a recommendation of the Furman Review.
  • Committed to funding the Joint European Torus programme in Oxfordshire as a wholly UK asset in the event the Commission does not renew the contract, giving the world-leading experts working at the facility certainty to continue their ground-breaking fusion energy research.
  • Invested £81 million in Extreme Photonics (state-of-the-art laser technology) at the UK’s cutting-edge facility in Oxfordshire.
  • Boosted the UK’s genomics industry with £45 million for Bioinformatics research in Cambridge.
  • £79 million funding for a new supercomputer in Edinburgh – five times faster than existing capabilities – whose processing power will contribute to discoveries in medicine, climate science and aerospace, and build on previous British breakthroughs including targeted treatments for arthritis and HIV.
  • Research institutes and innovating businesses will benefit from an exemption for PhD-level occupations from the cap on high-skilled visas from this autumn. Overseas research activity will also count as residence in the UK for the purpose of applying for settlement, meaning researchers will no longer be unfairly penalised for time spent overseas conducting vital fieldwork.

If you have any questions about this blog then please contact Peter.Smeed@aprilsixproof.com