Key manufacturing takeaways from the 2018 budget

Chancellor Phillip Hammond delivered his budget in the style we have become accustomed to but with what felt like a distinct change in direction. We've gone through this year's budget and picked out some key points for UK manufacturing in R&D, Skills, Trade, Investment, Energy and Plastics.


  • £1.6bn earmarked for R&D funding to support Artificial Intelligence (AI), quantum computing, future manufacturing, and nuclear fusion 
  • £1.1bn to the Industrial Strategy Challenge Fund (ISCF) projects, including £121m specifically for Made Smarter projects
  • Investment of up to £25 million through Knowledge Transfer Partnerships (KTPs) to boost business productivity
  • £115m for the UK's Digital and Medicines Discovery Catapults.


  • £150m in funding for fellowships to foster the UK's burgeoning skills pool with both homegrown and international talent 
  • Reduction in the co-investment rate for non-Levy paying businesses from 10% to 5% and flexibilities for Levy payers.


  • UK Export Finance (UKEF) will see a one-off increase to its Direct Lending Facility of up to £2bn over 2020-21 and 2021-22.


  • Increased the Annual Investment Allowance (AIA) threshold from £200,000 to £1 million for the next two years.


  • A five-year £315 million Industrial Energy Transformation Fund to support businesses with high energy use to transition to a low carbon future.


  • A new tax on on the on the production and import of plastic packaging from April 2022 of plastic packaging which contains less than 30% recycled plastic*
  • Reform the Packaging Producer Responsibility System, which will aim to increase producerresponsibility for the costs of packaging waste, including plastic*. 

*Both of these measures are subject to consultation in the coming months.

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    Chancellor's red box