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Autumn Statement Response: Britain must "Own the Global Language of Innovation”

Autumn Statement Response: Britain must "Own the Global Language of Innovation”

23rd November 2016

Earlier this year, the All Party Parliamentary Design and Innovation Group (APDIG), together with our members at the Design Business Association, submitted A Design for Brexit to HM Treasury, detailing ways in which the Chancellor could ensure that this vital sector of the economy could continue to grow and contribute to the future prosperity of the UK.

Mr Hammond’s Autumn Statement (the last ever, it transpires), offers some tentative signs that the new Government is serious about giving Britain’s designers and inventors the tools needed to contribute to a dynamic, open, and forward thinking economy.

APDIG’s submission focused on three primary areas.

  • Securing innovation in the tax system
  • Making design a driver for growth in a post-Brexit economy
  • Investing in infrastructure and giving design the resources to thrive

The submission’s core request in the tax system was to preserve and expand the system of research and development tax credits. Whilst the announcement of a review into the tax environment for R&D does not go as far as initially stated – but it is nevertheless gratifying to see that the government is taking action on this vital area.

APDIG look forward to working with the Treasury and other stakeholders to ensure that Britain’s tax system builds upon Britain’s reputation as a world leader for design and innovation research.

Outside the taxation system – Mr Hammond made a number of welcome announcements on funding for high-value design and manufacturing. The announcement of £2bn additional spending on research and development by 2020 as part of the new National Productivity Investment Fund (NPIF) is very welcome, as is the announcement of sustained investment in 5G and real high-speed broadband.  Access to world-class communications is of vital importance to the digital design sector, and APDIG hopes that the government will focus on ensuring that such investment also goes towards improving internet reliability, rather than speed.

Efforts to further devolve spending and tax-varying power to local authorities, devolved assemblies via reforms to business rates and city deals are also welcome – and APDIG is keen to work to ensure that British firms are in a position to contribute to the rebalancing of the British economy away from the South-East – as well as ensuring that London remains a world-leader for design, innovation and creative education.

Following the statement, DBA Chief Executive, Deborah Dawton said;

We’re delighted to see that our three key requests of Government in this Autumn Statement have been addressed.

A review of the tax credit environment for R&D gives us the opportunity to fight more vigorously for an expansion in their scope to capture areas of investment that are currently missing from the system – we’d like to see the full scope of design’s intervention in business recognised. This review will also allow us to put forward some solutions to overcoming the ambiguity that exists in the market about eligibility. Many more design businesses, and their clients, should be taking advantage of this tax break and aren’t.

Public investment in R&D is welcome and also sends a positive message to business about growing their level of investment in R&D given the current caution being exercised. Enhancing our position as a world leader in innovation is critical to many DBA members working at home and globally

The Government’s £0.7billion to support the market to roll out fast broadband is critical if we are to fulfil the potential for the DBA’s members clients to compete in markets that rely on their products and services being fully connected. The opportunities open to business with the Internet of Things, AR and other technologies are there for taking and the Government’s commitment will enable innovation in this space to happen at a faster rate.

Finally, the Chancellor made it clear that Brexit has seriously impacted growth forecasts for the foreseeable future, a matter that is recognised by APDIG.

The design sector has the potential to be a real powerhouse for the British economy, both during and after Brexit, but it can only assist in this endeavour if the Government continues to give it the tools to thrive, to reward innovation, and to continue to promote a vision of a Britain that is open, transparent and responsive to change.