“A week is a long time in politics.” That remark, attributed to former UK Prime Minister Harold Wilson during the sterling crisis of 1964, applies almost as well to the economic policymaking witnessed in the UK in late 2022.
Just three weeks after the then Chancellor Kwasi Kwarteng announced his Emergency Mini Budget on 23 September, his successor Jeremy Hunt delivered an Emergency Statement on 17 October in which many of Kwarteng’s proposed tax reforms were unceremoniously dumped.
One policy that remains, however, is a permanent increase of the Annual Investment Allowance (AIA) to £1 million from April 2023 onwards. This means that businesses can deduct 100 per cent of the costs of qualifying plant and machinery up to £1 million in the first year.
For UK manufacturers, it’s a bit of positive news at a challenging time. In particular, it brings a little more certainty to their 2023 investment and innovation plans. Previously, it was proposed that the...