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2009 Pre-Budget Report

December 9, 2009

BIS is playing a key role in the Government’s plans announced as part of today’s Pre-Budget Report (PBR). Only if the economy returns to strong and sustainable growth can we reduce public borrowing and protect frontline public services.

That’s why we are prioritising and targeting our actions to ensure that they support recovery and drive longer term economic growth.

We’re building on the work we’ve done already, with the latest statistics showing Real Help for Businesses is getting through and initiatives under way to invest in growth as part of our active industrial strategy, New Industry, New Jobs.

Extra funding to invest in growth through the Strategic Investment Fund

The Strategic Investment Fund (SIF) has been expanded with an additional £200 million, bringing the value of the fund to £950 million. This will extend the targeted support for investments across the UK economy to strengthen its capacity for innovation, job creation and growth.

New investments announced are particularly targeted at low carbon and emerging technology projects around the country.

Support for small businesses extended

While most firms report that they can get the finance they need we recognise that closing our support schemes too early could risk derailing the recovery by stifling the investment plans of the businesses that create growth and jobs.

The Enterprise Finance Guarantee facility will continue for another year, supporting up to £500 million of bank loans to viable businesses between April 2010 and March 2011.

The Government also announced that the Time to Pay scheme, which helps businesses spread their tax payments, will be extended for as long as necessary and the increase in corporation tax for smaller companies will be deferred until April 2011.

Incentivising Innovation

To strengthen the incentives to invest in innovative industries and ensure the UK remains an attractive location for innovation, a 10 per cent corporation tax rate will be introduced on income which stems from patents. This will benefit all businesses that develop patents – in particular innovative industries such as pharma, biotech, aerospace, automobiles, and telecomms.