James Sunderland backs the Budget which will entice people back into work and incentivise more R&D, both of which are much needed in Bracknell, and promotes Bracknell as a great location for the 12th new investment zone.
James Sunderland (Bracknell) (Con)
I rise to support last week’s excellent Budget, but also to provide some context about why it is so important for my constituency and why our local offer is so good.
As we know, Bracknell Forest is the silicon valley of the Thames valley. It has a strong and vibrant economy and can boast a number of world-class companies. Some 150 international companies have their offices in Bracknell, including Syngenta, 3M, Fujitsu, Honda, Waitrose, Panasonic, Hitachi, Dell and many others. Why is that important? Bracknell can act as a template for what can be achieved elsewhere in the country, because business and the way we live personally are integrated so well. It is also home to fantastic infrastructure and businesses, and it is vital that those companies remain in Bracknell as we go forward.
Well, so what? Last week, the Chancellor announced the delivery of 12 new investment zones in the west midlands, Greater Manchester, the north-east, South Yorkshire, West Yorkshire, the east midlands, Teesside and Liverpool, with at least one in each of Scotland, Wales and Northern Ireland. That totals 11, and my contention is that Berkshire—Bracknell—could be a perfect candidate for the 12th. With the Minister in her place, I am going to push for that and to state the case right now.
To qualify for £80 million of support for a range of interventions, including skills, infrastructure, tax relief and business rates retention, each area will need to successfully identify where it can offer
“a bold and imaginative partnership between local government and a university or research institute in a way that catalyses new innovation clusters.”—[Official Report, 15 March 2023; Vol. 729, c. 838.]
Well, guess what? We have lots of innovation clusters right now in Bracknell. We have a close tie-up locally with Reading University. We also have Syngenta at Jealott's Hill, which is hopefully about to become a global hub for agricultural R&D, with huge investment and 3,000 jobs. It is a no-brainer—we have all the ingredients locally to make a really good case.
Bracknell has full employment. It has one of the best-performing healthcare trusts in the country. Forty of 40 schools are rated good or outstanding. We have fantastic leisure facilities and open spaces. We have one of the top five average incomes of any borough in the country. We also have the Lexicon shopping centre. What more do we need? However, the important thing is that Bracknell is run by a Conservative council, and that council is absolutely focused on local investment, technology, infrastructure and full employment. The offer is really good locally.
Bracknell is a hub for R&D, and more than 200 organisations contribute to R&D in the constituency, in addition to the companies that are based there. Last week’s Budget labelled economic growth as its core objective, and it achieves that for many of Bracknell’s companies, especially in R&D. The Budget also promotes strong economic growth, exciting new job opportunities and stable local economies.
To prove the point, if a qualifying small or medium-sized business spends 40% or more of its total expenditure on R&D, it will be able to claim a credit worth £27 for every £100 spent. That is a huge tax rebate. When I talked to a boss of one of our Formula 1 teams based in the UK a couple of weeks ago, he told me that that is worth millions of pounds to him every year. It is worth millions of pounds to SMEs right across the UK. The UK has to be a place for R&D, for AI, for investment, for tech, for innovation—and we have just the place in Bracknell.
Before I finish, I have some concerns to raise. First, the way the R&D tax credits work is they are a net credit after tax. In other words, credit is taxed at the prevailing rate of corporation tax; if CT goes from 19% to 25%, the value of the credit goes down. My plea to the Minister is to please leave corporation tax as low as it can be, for the benefit of all of us.
Secondly, the type of business that will benefit in Bracknell will be life sciences businesses. Given the significant up-front development and—almost by definition —research costs, the challenge for these businesses locally is that pre-revenue and pre-profit tax credits may be of limited value, even if carried forward. Therefore, we need additional incentivisation to improve that.
Thirdly, we need a suitably qualified high-tech workforce to carry out R&D. We have that in Bracknell. Alongside tax credits, we need to ensure the availability of skilled labour. I cannot stress enough that in parts of the country, particularly the south-east and Berkshire, where we are lucky enough to have full employment, we need to do more to generate more labour. Therefore, the schemes announced last week to bring the over-50s and other people back into the workplace are absolutely brilliant.
I commend the Budget. It will entice people back into work and incentivise more R&D, which can only benefit Berkshire and Bracknell and elsewhere across the UK. Finally, why not an investment hub in Bracknell too?