The Plan for Growth
The Budget sets out the Government’s Plan for Growth. It builds on action taken at the Spending Review to restore economic stability.
The Plan is based around four overarching ambitions for the economy, and announcements in the Budget identified a range of reforms to help us meet these ambitions:
Ambition 1: To create the most competitive tax system in the G20
Announced in the Budget:
- The main rate of corporation tax will be reduced by a further 1%. From April 2011, the rate will reduce from 28% to 26% (instead of 27%). It will fall to 23% by 2014.
- New Controlled Foreign Company rules will be introduced. This will allow groups based in the UK to compete more effectively with those based overseas, while protecting the UK tax base.
- The Government will simplify the UK Tax system. This includes integrating the operation of Income Tax and National Insurance Contributions, helping UK business, and improving the administration of IR35 legislation – providing greater certainty for the freelance worker.
Ambition 2: To make the UK the best place in Europe to start, finance and grow a business
Announced in the Budget:
- £20m to support innovation through government procurement from SMEs.
- A moratorium for small businesses with less than ten employees to be exempt from new domestic regulation, starting from 1st April.
- One year extension of the small business rate relief holiday from 1 October 2011.
- Reform of the Enterprise Investment Scheme and Venture Capital Trusts.
- Reform of the R&D Tax Credit for SMEs. This will see the rate increase from 175% to 200% from April 2011, and 225% from April 2012 (subject to State Aid approval).
Ambition 3: To encourage investment and exports as a route to a more balanced economy
Announced in the Budget:
- A powerful new presumption in favour of sustainable development.
- £3 billion for the Green Investment Bank to help drive investment in green infrastructure.
New Technology Innovation Centres, including for Manufacturing, and £100 million of capital investment in science. - New support to help SMEs to break into overseas markets.
- Extension of the capital allowance short life asset regime for plant and machinery from 4 to 8 years, from April 2011 – more closely aligning the relief with depreciation.
Ambition 4: To create a more educated workforce that is the most flexible in Europe
Announced in the Budget:
- £180m package for 50,000 Apprenticeship places, 10,000 of which are for degree-level Higher Level Apprenticeships.
- Scrapping over £350 million worth of employment regulation.
The Plan for Growth
The Growth Review was set up to ensure that Government is doing all it can to support economic recovery. It is a cross-Whitehall programme to forensically look at the barriers to growth and what Government can do to address them. We have listened to the views of businesses and have developed further reforms in key areas of the economy in order to promote growth.
For more detail on the specific steps that Government is taking to support key areas of the economy, click on the links in the list below:
Following an intensive programme of engagement with business and based on the evidence collected ,action plans for growth in each area have been announced as part of the Autumn Statement on 29 November 2011. This builds on the radical programme of reforms set out in the Plan for Growth, and we are also focusing on:
Achievements
What have we achieved so far?
- Reform to the Enterprise Investment Scheme and Venture Capital Trusts (subject to State Aid approval).
- An increase in the rate of EIS income tax relief from 20% to 30% from 6 April 2011.
- An increase in the size of company that can be invested in, and the amount that can be invested.
[back to list]
[back to top of page]
- Reform and invigorate the UK’s competition framework and publication of Shaping Competitive Markets to support procurement choices that encourage competition.
- Publication of a binding set of principles of economic regulation.
Set out the vision for consumer empowerment, to help support consumers in making better choices.
[back to list]
[back to top of page]
- Government will scrap unnecessary audit rules for small businesses and press the European Commission to reduce the burden of mandatory audits for medium sized businesses.
- Government will also put forward legislation to exempt many subsidiaries from producing audited accounts and continue to encourage the Commission to provide more flexibility in how the smallest companies prepare and file accounts.
[back to list]
[back to top of page]
- To encourage investment in low-carbon power, the Government will introduce a carbon price floor for electricity generation from 1 April 2013.
- Government will scrap the unnecessary plans for a new Carbon Capture and Storage levy.
- Government will support the infrastructure development needed to enable the transition to a green economy through the Green Investment Bank.
[back to list]
[back to top of page]
- Localising choice about the use of previously developed land, removing nationally imposed brown field targets.
- Introduction of new land auctions; consulting on proposals to make it easier to convert commercial premises to residential and conducting an urgent review of the use class orders.
- Introduction of 21 new Enterprise Zones across England.
[back to list]
[back to top of page]
- An extensive public thematic review to reduce the existing stock of regulation starting on 7th April.
- Develop a new strategy for pushing the EU to regulate less, including urging the three EU institutions to ensure that new burdens on business are offset by savings elsewhere.
[back to list]
[back to top of page]
- The strategy, 'Britain Open for Business: Growth Through International Trade and Investment', sets out major new initiatives to help more SMEs to export and help larger companies seeking to win major overseas contracts. It also sets out new programmes for attracting much needed inward investment.
- UKTI will develop a more entrepreneurial culture that makes better use of private sector expertise. Alongside this, UKTI will provide an enhanced bespoke service to existing investors and potential inward investors.
- Commitment to work with banks to ensure a successful implementation of three new exporter products for bond support, export working capital, and foreign exchange credit.
[back to list]
[back to top of page]
- A new High Value Manufacturing Technology Innovation Centre (TIC), as well as nine new university-based Centres for Innovative Manufacturing by 2012, and a programme of new Manufacturing Fellowships to forge links between business and the research base.
- Expansion of the University Technical Colleges (UTCs) programme to establish at least 24 colleges by 2014.
- Accelerated launch of the new reformed Manufacturing Advisory Service from January 2012 with an additional £7 million to deliver supply chain activities over the next 3 years.
[back to list]
[back to top of page]
- Publication of the UK’s long term forward view of projects as part of the National Infrastructure Plan 2011, and quarterly publication of a rolling two year forward programme of infrastructure and construction projects where public funding has been agreed.
- Reform of the way in which Government procures public sector construction and infrastructure to reduce costs by up to 20 per cent.
- Accelerate the release of public sector land to encourage new homes and jobs.
[back to list]
[back to top of page]
- The Intellectual Property Office will improve the range of products and services available to support UK businesses, particularly SMEs, on issues relating to IP and Government commits to no further broad reviews of the IP regime during the lifetime of this Parliament.
- Substantial reduction of the burden placed on business by the communications and media regulatory framework.
[back to list]
[back to top of page]
- Establishing a health research regulatory agency to streamline clinical trials regulation, including a 70 day benchmark to recruit first patients for trials.
- Through Cogent, improve market signalling by bringing companies and educators together to ensure educators provide the skilled individuals the sector needs to grow.
- Improving the take up of assisted living technology, including an £18m R&D investment programme through the Technology Strategy Board.
[back to list]
[back to top of page]
- Ambition to abolish over two dozen regulatory offences under Money Laundering Regulations and exempt businesses with very low turnovers, which will reduce compliance burdens.
- The UK Border Agency (UKBA) will launch services for trusted business visa service users, entrepreneurs and business investors, move to online visa processing, and publish application guidance in more local languages.
[back to list]
[back to top of page]
- Invite the independent Low Pay Commission (LPC) in its next report to consider and implement the best way to give business clarity on future levels of the National Minimum Wage, including consideration of two-year recommendations.
- Introduction of a package of measures to support thriving town centres and build on the Town Centre First policy.
- Expansion of the Primary Authority model to apply consistent enforcement standards across a wider range of regulations and businesses and implementation of a package to simplify complex and inconsistent age-restricted sales regulations and licences.
[back to list]
[back to top of page]
- Introduction of a National Space Technology Programme to develop new technologies and IP, and de-risk technologies needed to directly increase the UK’s share of global high growth markets.
- Reforming the Outer Space Act by introducing an upper limit on liability for UK operators.
[back to list]
[back to top of page]
- Co-funding with the private sector of a £100 million campaign aiming to attract visitors to the UK in the years following 2012.
- Reducing regulation for businesses in the tourism industry by creating a task force of senior industry figures from across the UK, to identify opportunities to cut red tape.
[back to list]
[back to top of page]
Infrastructure
Investment in infrastructure is essential in unlocking other areas of investment and economic growth. Failing to tackle these issues will cost the economy.
Improving infrastructure
The Chief Secretary to the Treasury, Danny Alexander, will chair a new cabinet committee on infrastructure, to push through the delivery of the top 40 priority projects and programmes that are critical for growth.
[back to list]
[back to top of page]
Education and skills
Vital to our future and essential to building sustainable growth and stronger communities. A skilled workforce is necessary to stimulate the private-sector growth that will bring new jobs and new prosperity for people across the UK. Higher pupil test scores are associated with faster economic growth and around one fifth of the UK’s Gross Value Added between 1997 and 2007 can be attributed to skills.
Improving education and skills
- Give businesses the power to design, develop and purchase the vocational training programmes they need through a new £250 million Government pilot. In 2012, employers will be invited to bid for a share of the fund.
- Improve the quality of the Apprenticeship programme and reduce red tape. Including requiring all Apprenticeships to include training in English and Maths up to good GCSE standard; and ensuring that employers are able to advertise a vacancy within one month of deciding to take on an apprentice.
- Support the kite-marking of courses that employers value by a group of Science, Technology Engineering and Mathematics (STEM) focussed sector skills councils working with the CBI.
More on the Education and Skills Growth Review
[back to list]
[back to top of page]
Logistics
This makes a significant contribution to the national economy - the output of core logistics activities in 2009 accounted for almost 9% of UK GVA and around 7% of total employment. It is also a critically important enabler of the success of other businesses of all sizes and sectors– from corner shops to supermarkets, manufacturers to ebay entrepreneurs, and energy companies to waste businesses.
Improving logistics
- A Written Ministerial Statement to support the development of strategic rail freight interchanges – allowing developers to come forward with planning applications.
- The Government will consider the requirement for further guidance on quiet night time deliveries. The Government will also ask the Noise Abatement Society and the Freight Transport Association to build on the Quiet Deliveries Demonstration Scheme by expanding the existing Scheme’s best practice guidance into a toolkit that includes standards for quiet night time deliveries; and identify if further government guidance is needed to promote uptake.
- The Government will invest £55 million into the Strategic Rail Freight Network to help deliver schemes that remove bottlenecks and improve capability and longer term connectivity to the UK’s major ports.
[back to list]
[back to top of page]
Mid-sized businesses
Companies that have outgrown the small business tag, but are not yet at the scale of “blue chip” companies) There are about 10,000 mid-sized businesses in the UK, contributing around a fifth of the private sector workforce turnover.
Helping mid sized businesses grow
- £10 million for UKTI to provide tailored package of support for 500 more MSBs to export per year, as well as £35 million to double the number of SMEs reached each year (from 25,000 to 50,000). UKTI and UK Export Finance (the new name for ECGD) will also promote existing trade support and finance measures more widely.
- Eight Local Enterprise Partnerships have established a dedicated local pathfinder project to strengthen MSB business networks
- A task force of UK Business Schools will examine ways to improve the management capability and skills of MSBs, reporting in October 2012.
See Growing business for more on the six areas we're working in to make a difference to the UK's mid-sized businesses.
[back to list]
[back to top of page]
Rural economy
Rural England makes a substantial contribution to national economic growth contributing 19% of England’s GVA in 2008, estimated to be worth around £200bn. Studies have suggested its potential could be worth up to £347bn a year. Rural workplaces also house 22% of employment.
- Targeting £100m of the Rural Development Programme for England (RDPE) to support growth
- Opening the £20m Rural Community Broadband Fund
- Funding up to six Rural Growth Networks to demonstrate what local authorities and Local Enterprise Partnerships can do to sustain economic growth in rural areas
- Committing £25m to promote rural tourism and develop rural tourism destinations
[back to list]
[back to top of page]
Open data
An area that could provide opportunities to stimulate major new market developments, and where Government could maximise the market use of key UK public sector data assets.
Maximising the growth potential of public sector data
- Improving access to public data has the potential to boost growth by building data and analytics markets, expanding existing market opportunities and attracting inward investment (e.g. in the pharmaceutical industry) and creating new and innovative products and services (e.g. real-time transport mobile applications).
- The Government announces in the Autumn Statement that it is opening up access to core public datasets on transport, weather and health, including giving individuals access to their online GP records by the end of this Parliament.
- The Government is establishing an Open Data Institute to help industry exploit the opportunities created through release of this data.
[back to list]
[back to top of page]
What have we achieved so far?
A progress report, the Plan for Growth Implementation Update (PDF, 217KB), was published in July 2011. The report showed that the Government has already met or reached significant milestones on over 100 out of 137 reforms unveiled in the Plan for Growth in March 2011.
It showed that, in four months, the Government has made significant progress, working in partnership with business to fundamentally assess what every part of Government is doing to provide the conditions for private sector growth, including:
- Major reform of planning policy through a new National Planning Policy Framework which plans to radically streamline over 1,000 pages of planning policy to just 52 pages, underpinned by a new draft presumption in favour of sustainable development, so that the default answer is “yes” to planning proposals that support sustainable development
- Announced the location of the first 11 vanguard Enterprise Zones out of 21 in total to be created. The zones will benefit from discounts on business rates, new superfast broadband, lower levels of planning control and the potential to use enhanced capital allowances
- Reforms to the tax system to support business growth, including a reduction in corporation tax to 26 per cent this year, and 23 per cent by 2014 to make the UK rate the lowest in the G7, as well as detailed plans to establish a Patent Box, reform Controlled Foreign Company rules and provide additional R&D support for small and medium sized businesses
- A stop to the tide of regulation, including publishing the first results from the Red Tape Challenge, which saw plans to scrap or simplify more than 160 out of 257 regulations in the retail sector; the prevention of over £350 million worth of new regulations earlier this year, including the costly extension of the right to request time to train to small and medium sized enterprises; and the introduction of a moratorium exempting all UK micro businesses and start-ups from new domestic regulation for the next three years
- Working in partnership with business, the launch of the Business Growth Fund by five major UK banks to support established and growing businesses through a £2.5 billion fund
- Funding for an additional 50,000 apprenticeships over the next four years and doubling the number of new University Technical Colleges, supporting young people to gain vital skills demanded by business.
A further 45 reforms are due to reach a significant milestone by the end of 2011, including a new £50 million Business Angel Co-investment Fund and the launch of the first Technology and Innovation Centre.
[back to list]
[back to top of page]
