Today’s Budget will “spread investment and opportunity across the UK, helping businesses to grow, and improving access to skills, capital and ideas,” says Chancellor of the Exchequer Rishi Sunak.
He announced a number of measures that will impact on transport and the road to net zero.
The Government named the first eight Freeport locations around the UK – areas where it will be possible to carry out trade under different customs rules:
- East Midlands Airport
- Freeport East (Felixstowe and Harwich)
- Liverpool City Region
- Solent (Southampton)
- Thames (London Gateway Port and Port of Tilbury)
They will be special economic zones with different customs rules to make it easier and cheaper to do business.
Rishi Sunak describes the areas as “taking a unique approach” to doing business.
Businesses located in the freeport sites will benefit from:
- An enhanced 10% rate of Structures and Buildings Allowance for constructing or renovating non-residential structures and buildings
- An enhanced capital allowance of 100% for companies investing in plant and machinery for use in Freeport tax sites in Great Britain
- Full relief from Stamp Duty Land Tax on the purchase of land or property within Freeport tax sites in England
- Full Business Rates relief in Freeport tax sites in England
“Combined with changes to immigration rules, the Towns Fund, the UK-wide Levelling Up Fund, and the UK Community Renewal Fund, opportunities for well-paid jobs, innovation and growth will be levelled up across the country,” says the Chancellor.
Green power boost and ‘Green Bonds’
To help progress the Prime Minister’s ambitious Ten Point Plan for a green industrial revolution, new port infrastructure will be built to support the next generation of offshore wind projects in Teesside and Humberside.
The UK will issue at least £15 billion in green bonds to help finance the transition to net zero and the government will launch the world’s first sovereign green savings bond for retail investors.
The Budget also coincides with the publication of the government’s new Build Back Better: its plan for growth strategy, setting out how infrastructure, skills and innovation will drive the UK economy.
Net-Zero Innovation Fund
The Chancellor confirmed the creation of the Net Zero Innovation Fund, which will provide funding for low-carbon technologies and systems.
Decreasing the costs of decarbonisation, the Portfolio will help enable the UK to end its contribution to climate change and is being run by the Department for Business, Energy & Industrial Strategy
The Net Zero Innovation Portfolio succeeds the BEIS Energy Innovation Programme (EIP) which ran from 2015-2021.
Innovation is key to developing the green technologies needed to tackle climate change.
The Net Zero Innovation Portfolio is a £1 billion fund, announced in the Prime Minister’s ten point plan for a green industrial revolution, to accelerate the commercialisation of low-carbon technologies, systems and business models in power, buildings, and industry.
The Portfolio will decrease the costs of decarbonisation and set the UK on the path to a low carbon future. It will create “world-leading industries and new green jobs, invest in our regions, and help make the UK a science and innovation superpower,” says the Government.
Focussed on 10 priority areas, it includes:
- Floating offshore wind
- Nuclear advanced modular reactors (supported through the aligned Advanced Nuclear Fund)
- Energy storage and flexibility
- Direct air capture and greenhouse gas removal (GGR)
- Advanced CCUS
- Industrial fuel switching
- Disruptive technologies
Funding is being made available for projects across Great Britain and Northern Ireland. Competitions will be launching throughout 2021, with opportunities to apply offered through individual competitions.
1. Floating offshore wind
To support the development and demonstration of state of the art technologies and products in the floating offshore wind (FOW) industry.
2. Energy storage and flexibility
To support flexibility services and technologies, as well as non-conventional storage at varying technology readiness levels.
To bring down costs and reduce barriers within the full biomass to energy value chain. This includes improving the productivity of the UK’s biomass supply, the availability of conversion technologies, and the generation processes for energy such as biomethane, green hydrogen, biofuels and electricity
4. Direct air capture and greenhouse gas removal (GGR)
To support the research and development of direct air capture technologies in the UK.
130,000 small and medium sized businesses will be supported through the new Help to Grow scheme, providing the digital and management tools needed to innovate, grow and help drive recovery.
Beginning in April 2021, a new super-deduction will cut companies’ tax bill by 25p for every pound they invest in new equipment meaning they can reduce their taxable profits by 130% of the cost. This is worth £25 billion to companies over the two-year period the super-deduction will be in full effect.
Find out more: Official Budget 2021 summary of key measures is here: https://www.gov.uk/government/news/budget-2021-what-you-need-to-know