‘Unlock growth with reforms and by driving investment as Brexit nears’
THE UK faces challenges that can only be solved through partnership. In our preBudget letter to the Chancellor, the CBI proposes ways to unlock enterprise, increase the country’s competitiveness and attract more investors, all aimed at lifting productivity and sharing prosperity.
This is particularly important as the UK has the lowest level of business investment as a proportion of GDP in the G7, with the gap widening even further.
To set the UK on the right path, the CBI urges the Chancellor of the Exchequer to focus on three key areas to unlock growth in their submission ahead of the Budget: reform business rates in England to ensure firms can invest and grow, build on recent announcements to make the apprenticeship levy work for all parts of the UK; and improve capital allowances to drive investment, particularly in digital and low-carbon technologies.
The Budget must also help tackle the immediate impact of Brexit uncertainty.
Increasing the annual investment allowance will help lift the fog of uncertainty that is holding back investment, while hundreds of thousands of firms need help planning for the changes ahead.
They urgently need a one-stop shop for advice and information as the clock ticks down to March.
As we near the end of Brexit negotiations, the world’s gaze is fixed on these shores.
This Budget is a pivotal moment and chance to showcase the UK as an open, collaborative and confident country.
Entrepreneurs here and around the world need to see a UK committed to harnessing the power of business to innovate and tackle problems, from sustainability to inequality.
The UK government must focus its attention on making the UK a shining beacon of enterprise, at the top of every investment league table and known worldwide as a country that attracts, not deters, capital and talent.
The single most effective remedy to the structural challenges facing the UK economy is a simple one – increased business investment.
By investing in workers, equipment and crucially, digital and new technologies, the UK can establish itself in pole position for the future.
This is also the best way to raise productivity, and prosperity in all corners of the country. A win-win for all.
UK businesses have been underinvesting for many years, with the country suffering from the lowest level of business investment as a proportion of GDP in the G7. This is not because they don’t want to invest, but because the conditions are so often not conducive to doing so.
With the right government policy and support – from reforming business rates in England to ensuring the UK remains globally attractive to the financial services sector – this can change.
As the UK leaves the EU, there is no better moment than this Budget to show the UK government is committed to real partnership with business.
In turn the Welsh Government should keep pace with reforms to business rates in England to ensure Wales remains competitive in this field.
On Brexit, it is fundamental that a Withdrawal Agreement with the EU is agreed. This will provide temporary but essential relief for firms of all sizes.
Then attention can turn to the vital task of finalising our future economic and trading relationship with the EU.
In order for businesses to navigate the challenges and opportunities of Brexit, they badly need advice and information.
The government should ensure that funds allocated to Brexit readiness are used properly and communicate with business effectively.
The technologies of the future are rapidly driving changes in energy and infrastructure. The UK should be grasping the opportunities presented by the booming green energy sector by incentivising low-carbon products.
The transition to zero emissions is not just about ensuring we build the vehicles – that’s only half the story.
The other half is about ensuring demand, by making vehicles affordable and investing in infrastructure.
And we need to keep up the pace on developing world-beating digital infrastructure. Fast and reliable internet connections are mission critical for firms, particularly across the UK’s regions, so the government must lay out the steps to 5G.
On energy and infrastructure the CBI’s recommendations for government include – to urgently confirm whether the UK will remain in the EU Emissions Trading System after Brexit as well as the future of the Carbon Price Floor; bring forward planned changes to the company car tax regime to incentivise businesses to invest in vehicles with the lowest emissions; and close the gaps in existing digital infrastructure provision and clearly outline the UK’s path to a 5G future.
At a Wales level, business would welcome progress on the North Wales Growth Deal, clarity on the future of the UK Shared Prosperity Fund and a recommitment to ring-fencing early access to borrowing for the construction of the M4 Relief Road, pending the outcome of the public inquiry.
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