From UK companies in the automotive and e-mobility space, and international businesses reviewing investment opportunities, to the nation’s millions of drivers, scores of eyes were firmly fixed on Westminster yesterday as the Chancellor of the Exchequer, Jeremy Hunt, delivered the UK Government’s short- and long-term economic strategy.

As today’s UK newspapers review the broad range of announcements made in the Government’s Spring Budget, below we outline the key measures that will affect the automotive and e-mobility industries moving forward:

Energy costs

  • The Government will maintain the £2,500 Energy Price Guarantee for the next three months. According to the Chancellor, this will save households an average of £160.
  • The Climate Change Agreement Scheme will be extended by two years, giving eligible businesses £600 million of tax relief on energy efficiency measures.

Fuel duty

  • The Government will freeze fuel duty and maintain the 5p reduction for an additional 12 months from April 2023. This, according to the Chancellor, will save an average of approximately £100 for each motorist next year, and £200 since the 5p cut was introduced.

Investment Zones

  • In an effort to address the “UK’s lower business investment and higher economic inactivity”, 12 new ‘Investment Zones’ will be created – with the intention of attracting new investment through tax incentives for businesses.
  • Each zone will need to identify a location where they can propose a “bold and imaginative partnership” between local government and a university or research institute, in a way that catalyses innovation clusters. Each zone will have access to a total funding envelope of £80m of support for skills, infrastructure, tax reliefs, and business rates retention.
  • In England, these zones will be in the West Midlands, Greater Manchester, the North East, South Yorkshire, West Yorkshire, East Midlands, Teesside, and Liverpool. There will also be at least one zone each in Scotland, Wales, and Northern Ireland.

Transport

  • The Government will introduce a second round of the City Region Sustainable Transport Settlements, allocating £8.8 billion of investment in local transport networks over the next five-year funding period.

Business taxation

  • Building on its ‘super-deduction’ scheme, the Government will introduce a policy of full capital expensing for the next three years, with a view to it becoming permanent “as soon as responsibly possible”.
  • Under the new scheme, qualifying investments in IT, plant, or machinery can be deducted in full and immediately from taxable profits. According to the Government, this represents a corporation tax cut worth an average of £9 billion for every year it’s in place.
  • An enhanced credit scheme is also set to be established for qualifying small to medium-sized enterprises (SMEs). This scheme mandates that if SMEs spend more than 40% of their expenditure on R&D, they are able to claim a credit worth £27 for every £100 they’ve spent.
  • In addition to the capital allowances updates, the Government also confirmed that the rate of Corporation Tax will increase from 19% to 25%.

Growth industries

  • The Government also set out its strategy for building a “larger, more diverse financing system, where the benefits of investment in high-growth firms are available for more investors.”
  • It stated that the full package of measures to incentivise investment in this respect will be set out in the Autumn Statement, and will “complete the Government’s response” to the likes of the Inflation Reduction Act in the USA.
  • One of the key sets of measures that the Chancellor did announce in this Budget, however, focused on Artificial Intelligence (AI).
  • Under a raft of new schemes, the Government will be launching an AI sandbox to trial new, faster approaches that help innovators get cutting-edge products to market.
  • Clarity will also be provided on intellectual property rules, so generative AI companies can access the materials they need easier.
  • Measures to support the development of AI through advanced and quantum computing were also announced. £900 million of funding will be set aside for achieving an exascale computer, while the Government’s National Quantum Strategy will aim to make the UK “a world-leading quantum-enabled economy” by 2033, with an R&D programme totalling £2.5 billion.
  • The Manchester Prize was also announced, offering an award of £1 million every year for the next 10 years to the person or team that delivers the most ground-breaking research in the field of AI.

With the content of the Budget set to inform media discussion in the immediate future, remaining cognisant of the themes discussed – and demonstrating your understanding of your target markets and what your business is doing to support them – will be crucial to showcasing your relatability, expertise and in-depth knowledge of what makes your sector tick. It will also demonstrate an ability to adapt your offering, deliver effective results and provide certainty of service – helping to enhance your reputation in the face of an uncertain economic climate.

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