The levy control framework will be replaced with a new set of cost controls which will be “set out later this year”, the chancellor Philip Hammond has revealed in his 2017 spring Budget.
Starting in 2021/22 the government will also “target a total carbon price” and “set a specific tax rate at a later date, giving businesses greater clarity on the total price they will pay”. “Further details on carbon prices for the 2020s” will be laid out in the coming autumn budget.
The chancellor confirmed that a green paper examining markets which are not working “efficiently or fairly” will be published “shortly”. Initial steps by the government to protect consumers will include legislation enabling enforcement bodies such as the Competition and Markets Authority to request court-ordered fines against companies that break consumer law.
“This will be a strong and effective deterrent, and will enable consumer bodies to take tough action against firms that mislead or mistreat consumers,” the budget document said.
The treasury will invest £270 million in 2017/18 to “kick-start” the development of disruptive technologies as part of the £23 billion national productivity investment fund (NPIF), which Hammond announced in his autumn statement. These disruptive technologies will include batteries for the next generation of electric vehicles and artificial intelligence and robotics systems for use in offshore and nuclear energy, among other industries.
The NPIF will also invest £250 million over the next four years to “build the pipeline of high-skilled research talent necessary for a growing and innovative economy”. Of that, £90 million will be used to provide an additional 1,000 PhD places – 85 per cent of them in science, technology, engineering and maths disciplines – and £160 million will be used to support new fellowships for early and mid-career researchers.
The government will reform technical qualifications with the introduction of T-levels for 16 to 19-year-olds from 2019/20 and will make an additional £500 million of annual funding available to support the new qualifications once they are implemented. A further £40 million will be spent by 2018/19 to “test different approaches to help people to retrain and upskill throughout their working lives”.
The revaluation process for business rates will also be reformed to make it “smoother and more frequent” and avoid a repeat of the “dramatic increases” which have recently caused distress to a range of businesses, including small scale renewables.
To maximise the economic recovery from Britain’s oil and gas industry a formal discussion paper will be published “on the case for allowing transfers of tax history between buyers and sellers”. Corporation tax will fall to 17 per cent in 2020.
Reaction to the budget to follow.