Budget 2023 summary: a Scientific Superpower, East West Rail and boosting labour supply
As Britain prepares to solidify its position as a scientific superpower, the property industry and life science sector were watching closely during yesterday’s Budget. From investment in R&D, support for infrastructure in the Arc and measures to boost construction labour supply, the Bidwells team reviews the Government ‘s latest support for growth.
Cambridge Biomedical Campus, Abcam
Two big science superpower mentions
The term ‘scientific superpower’ was referenced by Jeremy Hunt twice in his speech yesterday in the House of Commons. Earlier this month, the chancellor Jeremy Hunt gave a speech at Bloomberg’s headquarters, in which he said that he wants to “turn the UK into the world’s next Silicon Valley”. The Chancellor’s commitment to enterprise was welcomed and addresses a core priority to cement the UK as a scientific superpower.
Cambridge’s Biomedical Campus was referenced by name in the document (3.98, Spring Budget)- a clear indicator that the Oxford-Cambridge Arc is the home to life sciences innovation in the UK. Harwell Innovation Campus, Cambridge Science Park, Oxford Science Park and Babraham Research Campus are creating innovation hubs for the nation’s most pioneering start-ups.
UK life sciences has a critical mass in the region and is responsible for seven percent of England’s economic output. Vitally, the budget named the supply of lab space as being ‘key’ to driving investment into life science clusters (3.99, Spring Budget). The high level of demand for laboratory and office space in Cambridge continues, running close to record levels in the city, exceeding two million square feet at the end of 2022, representing a 68 percent increase from the first half of 2020 in the early days of the pandemic.
The government has also allocated £100 million to fund transformative R&D projects and introduced a new tax credit for R&D intensive SMEs beginning 1 April 2023, allowing £27 to be claimed for every £100 of R&D investment (3.75, Spring Budget). Knowledge-intensive businesses, such as those involved in pharmaceuticals and diagnostics, have accounted for more than 80 percent of the combined office and laboratory floor space take up across the city over the past two years, amounting to 900,000 sq ft.
As called for in our Radical Capital report, ministers should look to establish a ‘Science and Technology Growth Board’ in the Oxford-Cambridge Arc to transform the region into a U.S-style supercluster. Failure to do so could result in the UK economy missing out on £50 billion of GVA by 2030.
East West Rail still on track
The lack of physical infrastructure in the UK hampers the growth ambitions of the UK’s successful start-ups and is the barrier to the UK producing science and technology giants.
Importantly, the government have re-committed to the East West Rail (3.98, Spring Budget) and have announced they will confirm the route for the new sector between Cambridge and Bedford later this spring. The Budget also revealed the local authorities will be provided with funding to develop their plans for strategic economic growth around new stations.
The Enterprise section of Jeremy Hunt’s speech provides much needed confirmation that the government is committed to boosting the supply of commercial development in the UK. Importantly, they referenced the recent National Planning Policy Framework (3.98, Spring Budget), and have committed to setting out further details for supporting growth. This reference to the NPPF hopefully signals that the government recognises the need to liberalise the planning system to deliver important office, laboratory and mixed use development space.
Green light for foreign construction workers
The government have made clear their commitment to “delivering high quality infrastructure to boost growth across the country” (3.134, Spring Budget). But since Brexit, the UK has seen a drought in the labour supply of construction workers, making the development of key commercial infrastructure challenging.
When speaking on Levelling Up, the Budget has revealed that construction will be added to the list of sectors with relaxed immigration requirements (3.42, Spring Budget). This move will help to accelerate the development of much needed infrastructure across the Arc, particularly much needed office and laboratory space.
As the UK looks to cement its position as a scientific superpower, the Spring Budget 2023's investment in life sciences, infrastructure, and labour supply government is further focussing on innovation and sustainability, with the UK still poised to lead the world in science and technology across the Oxford-Cambridge Arc.