Against a backdrop of solid UK growth but increasing global risks, the CBI is calling on the Chancellor to focus on infrastructure investment, encouraging innovation and removing barriers to enterprise, in the Autumn Statement.
The latest CBI/URS Infrastructure Survey shows that businesses expect transport and energy infrastructure to worsen over the next five years, so the CBI’s package of growth boosting measures include: a tunnel under Stonehenge to relieve congestion to the South West; keeping momentum up on the A14 upgrade; and a final decision on the guarantee for Hinkley Point C power station.
The UK’s leading business group also wants the Government to: reform business rates; supercharge the research and development (R&D) tax credit; ensure further devolution passes the business growth test while maintaining the integrity of the UK’s internal market; and freeze long-haul Air Passenger Duty.
Businesses recognise that the public finances are under significant pressure and with the Government still borrowing around £100bn a year, a new fiscal framework should enshrine a continued commitment to deficit reduction. In light of this, the cost of the CBI’s targeted proposals is a modest £676m in 2015/16, paid for through public services reform and departmental savings.
John Cridland (pictured), CBI Director-General, said: “The UK recovery is on solid ground but it is in increasingly stark contrast to what’s happening elsewhere in the world. With Eurozone economies flat-lining, continuing political tension between Russia and Ukraine, and in the Middle East, and slowing emerging markets, we must be alert to the possible knock-on effects here.
“Businesses recognise the public purse is under pressure, which is why they want the Government to continue tackling the deficit, alongside targeted, affordable measures to keep UK growth motoring now, in the next Parliament, and beyond.
“We know firms are concerned about the state of our roads and energy supply and affordability, so the arrowhead of business recommendations is a major push on improving the country’s infrastructure. Businesses want to see the Government set out clear project plans, with start dates and timescales.
“We also want to see the Government encourage innovation and enterprise by reforming the outdated business rates system, which is a disincentive to company expansion, alongside expanding the R&D tax credit to encourage development, as well as research activity, in the UK.
“And freezing long-haul Air Passenger Duty would help more firms in all UK regions and nations, particularly smaller ones, export their products and services to new growth markets around the world, like Mexico and Indonesia.”
The CBI’s package of growth boosting measures include:
- Switching the uprating of business rates from the Retail Price Index (RPI) to the Consumer Prices Index (CPI), alongside raising the threshold for smaller properties and more frequent property valuations
- Supercharging the R&D tax credit to incentivise the domestic development, commercialisation and manufacture of our ideas here in the UK, and prioritising Government spending on science and catapult centres
- Addressing the Annual Investment Allowance ‘cliff edge’, which is due to fall from £500,000 to £25,000 in 2016
- Ensuring further devolution promotes local growth while maintaining the integrity of the internal market, including a common regime for business taxes, employment law and the labour market, financial services and energy
- Freeze Band B, long-haul Air Passenger Duty tax.