South East: SEEDA welcomes Budget support
The South East England Development Agency (SEEDA) welcomed the announcement in the Budget of a package of business support measures to boost global competitiveness, smart growth and sustainable prosperity – the three pillars of the South East’s Regional Economic Strategy (RES) 2006-2016.
Responding to the Budget, SEEDA chairman James Brathwaite highlighted the announcement of significant increases in the value of research and development (R&D) tax credits, a new environmental tax credit, and a boost to the funding available through Regional Development Agencies (RDAs) and Business Links to promote environmental innovation and energy efficiency among businesses.
The chancellor’s focus on R&D comes just two weeks after his visit to the South East region, which included a tour of Crawley-based fuel cell technology company, Ceres Power, which is developing money saving and environmentally-friendly alternative energy products from research initiated at Imperial College. The chancellor also attended a meeting at Gatwick to hear the views of business leaders from across the South East on their priorities for skills, global competition, and science and innovation.
The visit, hosted by the SEEDA chairman, allowed the chancellor to learn more about the needs of the South East’s world class businesses in meeting the challenges of global competitiveness and achieving sustainable prosperity. Responding to the Budget announcements, Brathwaite said that he particularly welcomed the chancellor’s renewed commitment to R&D tax credits. With 25% of total UK R&D expenditure, 16% of the UK’s GVA (Gross Value Added), and 13% of its total manufacturing output, the South East will benefit from the changes to the tax credit scheme, Brathwaite said.
Under the new proposals, small and medium-sized companies will receive 175% tax relief on R&D expenditure (previously 150%) and large companies will get 130% (125%).
The Budget also introduces a new environmental tax credit worth £40 million a year to businesses, and increases the funding available for Regional Development Agencies (RDAs) and Business Links to support small businesses with advice and incentives for environmental improvement, innovation and energy audits (an increase from £140m in 2006/7 to £240m in 2007/8).
Brathwaite commented: “The Chancellor’s Budget recognises that, for the UK to meet global challenges and secure its global competitiveness, performance will need to be driven by flexible, enterprising and highly-skilled businesses and workers. The R&D tax credit changes are an acknowledgement that we must invest in success to meet the Global Challenge – one of the headline targets of the Regional Economic Strategy – and build on the South East region’s existing position as the powerhouse of the UK economy.
“In addition, by raising the budget for RDAs and Business Links to promote environmental innovation and energy efficiency, the Chancellor has made a strong commitment to the goal of environmental sustainability – enabling businesses in the English regions to contribute positively to meeting the UK’s climate change targets while at the same time boosting their competitiveness and efficiency.”
