Despite recent turbulence and ongoing uncertainty, the British economy is proving resilient and businesses are encouraged to forge ahead. Chancellor Philip Hammond’s Autumn Statement revealed that the government is willing to provide funding support to increase business confidence and growth.
Hammond announced several new policies which will impact two of BNP Paribas Leasing Solutions’ key markets – telecoms and construction. A National Productivity Investment Fund was announced which will contribute £23bn to innovation and infrastructure over the next five years. This will give small businesses in the “tarmac, tracks and telecoms” sectors access to financial assistance that will enable them to compete with larger, more established competitors.
Here is an overview of how these policies will impact telecoms and construction.
To address poor internet access, more than £1 billion of the National Productivity Fund has been earmarked to deliver high-speed fibre broadband to two million homes. The connection will be far more reliable and secure than that currently delivered by traditional copper internet cables.
In response to business pressure, the government has also pledged to back the UK’s digital economy with a £400m Digital Infrastructure Fund, which private sector investors are expected to double. The fund will be aimed at fibre providers looking to expand their range of services.
There is also concern that the UK is falling behind South Korea, Japan, and China in the race for the fastest broadband and mobile networks. In an attempt to keep up with Asia’s digitally advanced nations, Mr Hammond has allocated £740m for local telco operators to trial superfast 5G mobile networks. These networks will be linked to fibre-optic systems to provide greater wireless capacity for faster downloads of large data files.
The UK’s housing crisis is a worrying economic weakness. To address the current lack of affordable housing, particularly in areas like London, £7.2bn from the National Productivity Investment Fund will be spent on building new homes.
A further £2.3bn from the National Productivity Investment Fund will go towards new housing infrastructure – building access roads and water connections to support construction of new homes. In addition, £1.4bn will be used to build 40,000 affordable new homes and £1.7bn to fast-track the construction of new homes on public sector land. Overall, the UK housing sector will receive increased year-on-year financial support between 2017 and 2020.
Transport infrastructure is in line to benefit too. Highways England will receive £220m for road improvements and £1.1bn is going to local authorities to maintain their roads and public transport systems. An additional £27m has been allocated to creating the Oxford-Cambridge Expressway and the government will provide £100m to accelerate construction of the East-West Rail Link’s western section.
This significant funding injection will give a lot of smaller construction firms the chance to grow and win new business across the country, and new equipment will be needed to support the planned projects.
Despite calls from business, the Chancellor didn’t announce any increase in the annual investment allowance (AIA). It’s key that businesses across all sectors maximise their annual investment allowance, which currently stands at £200,000, before the December 31st deadline.
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