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Budget 2023: As it happened

What chancellor Jeremy Hunt offered the research world in this year’s budget

13:55—Okay folks, that’s a wrap. Research Professional News staff are delving into the budget documents and there will be more detail on developments for the sector published soon.

—A bit of outside reaction. Steve West, president of Universities UK and vice-chancellor of UWE Bristol, welcomed the chancellor’s commitment to investment zones, saying: “This much needed investment will aid in deepening local ties between universities, SMEs, and support the upskilling of people in local communities. Universities UK is keen to work with government on implementing its plans for investment zones around higher education institutions and look forward to seeing what the future holds."

But West adds: “Although this announcement is a step in the right direction, we continue to urge the government to further develop initiatives such as degree apprenticeships and the lifelong loan entitlement as we will need the skilled graduates to maximise the economic impact of the investment zones.”

—Damning reaction from Starmer who says the UK is "13 years stuck in a doom loop of lower growth, higher taxes and broken public services". The leader of the opposition adds: "On science. innovation and tech we should be leading not lagging…the announcements today are nowhere near the mark”.

— A bit more detail on how Hunt says he wants to reform the UK’s childcare system, affecting workers across all sectors, due to having “one of the most expensive systems in the world”.

“For may women, a career break become a career end,” Hunt says. He announces a series of reforms including piloting incentive payments of £600 for child minders who sign up to the profession rising to £1,200 for those who join through an agency. Hunt also says he is increasing the funding pay to nurseries providing free childcare under the hours offer by £204mn rising to £288mn next year.

—The meat of Hunt’s speech is over, time for questions now.

13.32—Hunt switches focus to the workforce, specifically training for older people. Coining a new and slightly alarming government buzzword, he announces the launch of “returnerships” – skills programmes for older workers.

—That announcement on Vallance’s review of regulating emerging technologies and measures to boost AI research in full: "I’m accepting all nine of the digital technology recommendations made by Patrick Vallance in the review I asked him to do in the Autumn statement. That means I can report to the house that we will launch an AI sandbox to trial new faster approaches to help innovators get cutting-edge products to market."

"We’ll work at pace with the intellectual property to get clarity on IP rules so that generative AI companies can access the material they need and we’ll ask Patrick’s successor Dame Angela McClean to report before the summer on options around the growth duty for regulators."

“Because AI needs computing horsepower, I today commit around £900m of funding to implement the recommendations of the independent Future of Compute review for an exascale computer.”

“The power needed by AI’s complex algorithms can also be provided by quantum computing so today we’ll publish a quantum strategy which will set out our vision to be a world-leading quantum-enabled economy by 2033 with a research and innovation programme totalling £2.5bn.

"I also want to encourage the best AI research to happen in the UK. So we will award a prize of £1m every year for the next 10 years to the person or team that does the most ground-breaking British AI research. The world’s first stored programme computer was built at the University of Manchester in 1948 and was known as the Manchester baby. Seventy-five years on the baby has grown up so I will call this new national AI award the Manchester prize in its honour.”

—More on those medical regulation proposals. Hunt says from 2024, the MHRA will move to "a different model which will allow rapid near automatic sign off for medicines and technologies already approved by trusted regulators in other parts of the world such as the US, Europe or Japan.

"At the same time they will set up a swift new approval process for the most cutting edge medicines and devices to ensure the uk becomes a global centre for their development. And with an extra £10m of fundings over the next two years they will put in place the quickest, safest regulatory approval in the world."

—On investment in life sciences, Hunt announces a string of changes designed to speed up the regulatory approval in medical technologies, saying from 2024 the UK will have faster signoff of technologies already approved in regions such as the US, Europe and Japan. He also trails a “larger, more diverse financing system” for innovation, including in life sciences, to unlock investment from sources such as pensions, which will follow in the Autumn statement.

—In relation to the review of technology regulation by government chief scientific adviser Patrick Vallance, the chancellor promises £2.5bn for quantum R&D.

13.16—Hunt also announced £20 billion of support for the early development of carbon capture usage and storage with the goal of capturing 20 to 30 million tons of CO2 per year by 2030.

—Hunt says that increasing nuclear capacity is "vital to achieving net zero commitments" and that "nuclear power will be formally classed as environmentally sustainable".

"That will give it access to the same investment incentives as renewable energy and alongside that will come more public investment," he adds.

These include the launch of ‘Great British Nuclear’, which he says "will reduce costs along the nuclear supply chain" and a competition for small modular reactors "to be completed by the end of this year and if demonstrated as viable we will co-fund this exciting new technology."

—Hunt’s statement on tax credits in full: “In the autumn I said I would return with a more robust R&D tax credits scheme for smaller research-intensive companies. So today I’m introducing an enhanced credit, which means if a qualifying small or medium-sized business spends 40 per cent or more of their total expenditure on R&D they’ll be able to claim a credit worth £27 for every £100 they spend.”

“That means an eligible cancer drug company spending £2m on research and development will receive over £500,000 to help them develop breakthrough treatments. It’s a £1.8bn package of support helping 20,000 cutting-edge companies who day-by-day are turning Britain into a science superpower.”

—He announces an “enhanced credit” scheme for SMEs, offering a £27 credit for every £100 spent on R&D – a measure he claims is a £1.8bn package of support for innovative businesses, including in the life sciences sector.

13.04—The chancellor is onto tax credits, an area of high interest for research after recent focus on changes designed to clamp down on fraud.

13.01—More detail on those investment zones: “In England we’ve identified the following areas as having the potential to host one: the West Midlands, Greater Manchester, the North East, South Yorkshire, West Yorkshire, East Midlands, Teeside and, once again, Liverpool. There will also be at least one in Scotland, Wales and Northern Ireland."

The chancellor continued: “To be chosen each area must identify a location where they can offer a bold and imaginative partnership between local government and a university or research institute in a way that catalyses new innovation clusters. If the application is successful they will have access to £80m in support for a range of interventions including skills, infrastructure, tax reliefs and business rates retention.”

—Hunt is making his way through his "four pillars of our industrial strategy" to address productivity issues. "They all conveniently start with the letter E: enterprise, employment, education, and everywhere." He’s onto employment…

12.57—He goes on to tie universities into the agenda specifically, saying 12 new investment zones will create “bold” partnerships that include local government working with universities and research institutes.

12.56—First mention of the government’s levelling up agenda. Hunt says the government was elected on a mandate to level up, nearly £4bn was allocated in first two rounds of the Levelling Up Fund, and a third round will follow.

—Hunt hails “our strength in new industries which will shape this century”. “Over the last 13 years under Conservative leadership we have become the world’s third trillion-dollar tech economy after the US and China. We built the largest life sciences sector in Europe, producing a Covid vaccine which saved six million lives and a treatment that saved a million more.”

—"Over the last 13 years, under Conservative leadership, we have become the world’s third trillion dollar tech economy after the US and China. We built the largest life sciences sector in Europe," says Hunt.

12.48—Hunt praises UK’s “female entrepreneurs” and says the UK is a “world leader” in offshore wind

12.47—The chancellor says growth will be the focus of today’s budget. Let’s see how closely he links that ‘science and technology superpower’ comment into that agenda.

12.44—Big picture stuff on national debt, public sector net borrowing and government spending

12.35—Hunt gets "science and technology superpower" into his opening statement, saying the government will deliver growth in part by "harnessing British ingenuity"

12.32—And we’re off! 

12.30—Prime minister’s questions is coming to an end, the chancellor is up next…

12.05—The chancellor has been asked to provide more support for students after a survey published earlier this week found that 60 per cent of postgraduate research students said the cost of living crisis is causing their academic performance to suffer.

Tim Bradshaw, Russell Group chief executive, said: “As an immediate step, we urge the chancellor in his upcoming budget to address flaws in the maintenance loans system and uplift loans so they reflect actual inflation since 2020-21”.

11.55—With half an hour or so to go until Jeremy Hunt takes to the despatch box, why not catch up on the latest issue of Research Fortnight, published this morning.

In the issue: UK scientists are frozen out of EU fusion energy projects, the government’s latest R&D plans come under fire and we examine the Nurse Review. Plus, how Jeremy Farrar reshaped the Wellcome Trust.

—The BBC has been reporting that today’s budget will also include outcomes of a regulatory review of five high growth sectors, including artificial intelligence and pharmaceuticals, carried out by the chief scientific adviser Patrick Vallance.

—Many R&D-based businesses have their fingers crossed that the Treasury will announce further changes to R&D tax credits after the government announced plans to cut tax relief for small and medium-sized enterprises announced last autumn.

Following a major backlash to the plans from businesses, the Financial Times has reported that Hunt is set to restore the tax relief to companies in some sectors, such as AI and fintech, that can prove they are spending large amounts on research.

The chancellor has been warned that the UK risks losing its position as the most generous OECD country for R&D tax credits to France if the cuts go ahead as planned.

—The chancellor is also expected to announce £100 million for 26 R&D projects in Glasgow, Greater Manchester and the West Midlands through an “innovation accelerators programme”.

The funding is designed to boost R&D in city regions, linked to the government’s levelling up agenda.

UPDATE: This funding was first announced in August 2022.

—Expect to hear more detail on 12 investment zones that the Treasury trailed earlier this week. Each zone will be backed with £80 million over five years and will be linked to universities or research institutions.

The investment zones are expected to focus on five sectors: life sciences, creative industries, digital technology, advanced manufacturing and green industries.

Eight locations in England have been shortlisted across the midlands, the northwest and the northeast, while the devolved administrations in Scotland, Wales and Northern Ireland will also establish investment zones, the government said.

—While most of us are glued to the budget news, Prospect trade union members across the civil service and its agencies are taking strike action today in a dispute over pay, potential job losses and threats to redundancy terms.

Staff at UK Research and Innovation voted for strike action, along with those in the Met Office, the Defence Science and Technology Laboratory, the Health and Safety Executive, the Intellectual Property Office, the Animal and Plant Health Agency and Natural England.

Prospect’s general secretary Mike Clancy will be attending the picket at Harwell Science and Innovation Campus from 11am.

—Subscribers to 8am Playbook will have read Erica Conway’s column for Sunday Reading on the budget.

Here’s an excerpt from what the chair of the British Universities Finance Directors Group is hoping for:

I want to see effective inflation controls. I want realistic public sector and associated pay awards. I want spending on core infrastructure such as roads, railways, schools and more, to match their needs. 

I am looking for support for students and those on lower wages to respond to the increasing costs of living, through easily accessed, targeted help that recognises that most were not able to access schemes to assist with rising energy costs, for example. 

I am looking for innovation to support all of us—businesses and individuals—in changing our behaviours to deliver carbon net zero, and a drive to enable a significant shift towards the other UN Sustainable Development Goals. 

I want a balanced financial position for the UK economy that is based on data rather than one-line policy statements. And it would be wonderful if that could be funded from efficiencies or changes in spending priorities, with no significant tax increases. All that’s a tall order.

—Welcome to the Research Professional News live blog of the 2023 budget. Jeremy Hunt is due to deliver his budget speech in the House of Commons at 12.30pm. Stay tuned to find out what the chancellor has in store for the research and innovation world.