Mixed bag of opportunities from Reeves

DYLAN JONES-EVANS

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THE Comprehensive Spending Review (CSR) delivered by Chancellor Rachel Reeves arrives at a time of global economic uncertainty and when the nation desperately needs growth.

As I’ve said many times in the past, entrepreneurs and small businesses should be at the heart of government but support for this critical part of the economy has often been patchy, slow and inconsistent by governments of all political colours.

And while this latest spending review does offer some promising signals for the UK’s entrepreneurial eco-system, there are also contradictions that undermine its credibility.

On the surface, there is a clear narrative that this government sees investment rather than austerity as the way forward. The numbers are notable with a £120bn uplift in capital spending to be spread across infrastructure, energy, digital transformation and research.

The British Business Bank will also be given more financial firepower to issue equity and loan-based support to businesses, and a new National Wealth Fund will provide nearly £28bn in investment for clean energy, advanced manufacturing, and digital technology.

But dig deeper behind those headlines and there is evidence of style over substance with the most striking example being the government's claim to be “backing Britain's innovators, researchers and entrepreneurs” by committing to £22bn per year in research and development funding by the end of the spending review period.

At face value, this sounds ambitious but while the Treasury boasts that total R&D spending over the period will be £86bn, the pace of investment growth has been slowed even compared to the previous Conservative government.

In practice, this amounts to a scaling back of R&D ambition at the very moment when the global race for innovation leadership is accelerating.