The CBI, which speaks for the UK business community, says the Government should set out an “ambitious, pro-enterprise agenda” that capitalises on the UK’s core economic strengths.
Why? So that foundations can be laid to allow firms to navigate a more uncertain economic outlook, invest for the future and “get all regions firing on all cylinders”, in its view – adding that, “Rarely has there been a more important Autumn Statement.”
While the economy has shown resilience in the months since the vote to leave the EU, claims the organisation, economic uncertainty continues over the UK’s future relationship with the EU and its impact on firms’ investment plans.
To help, it argues, in the short-term, the Government needs to stimulate confidence and investment, while over the longer-term the mission should be to balance productivity growth across all regions via what it wants to be seen as an “ambitious” plan for infrastructure investment.
Specifically, it has today called for:
- An increase in average Public Sector Net Investment spending this Parliament to 2% of GDP (it is currently forecast to fall to 1.7%), at a stroke increasing average annual public investment by £6 billion. Part of this should go to essential local transport infrastructure, it says, including through the Local Growth Fund, which was five times oversubscribed in the latest funding round. This investment will drive productivity by increasing the scale of regional labour markets
- Fast delivery of over £425 billion worth of planned infrastructure investments with clear timeframes and implementation plans, in particular on roads and rail investment including the transformation of the A303/A30/A358 corridor to Land’s End to an Expressway and the dualling of the A1 from Newcastle to Scotland
- Increase the Annual Investment Allowance – “a vital allowance for mid-sized firms” – to £1 million until the end of 2018 to increase the attractiveness of near term investment
- Use business rates to incentivise productive investment – especially from our manufacturers – by exempting new plant and machinery investments from rates bills and bringing forward the RPI to CPI switch
- Double funding for Innovate UK and super-charge the R&D tax credit system by 50% for firms not only researching, but developing new products here in the UK
- More support for training, as building “a more prosperous and inclusive economy that works for everyone” means business and Government need to do more to develop and attract a wider range of people into careers, plus give them the skills and opportunities they need to earn more, reach their potential and help businesses thrive
- Finally, it wants the new Chancellor to publicly commit to a long-term target for R&D spending of 3% of GDP
For Carolyn Fairbairn, CBI Director-General, “The Chancellor should capitalise on the UK’s core strengths, setting out a pro-enterprise agenda that instils confidence and kick starts investment.
“With huge variations in productivity between different parts of the country, the top priority must be to set out a programme that will get our regions firing on all cylinders and supports businesses to innovate, invest and create jobs in the years ahead.”
The CBI speaks on behalf of 190,000 businesses of all sizes and sectors, and its corporate members together employ nearly 7 million people, about one third of all the country’s private sector-employees.
