CBI reaction to the Autumn Statement

Posted on 29 Nov 2011

John Cridland, CBI director-general, said: “This autumn statement works with the realities of today and provides an imaginative framework for UK businesses as it strives to secure growth and jobs.”

Mr Cridland added: “The downgraded forecasts and outlook were no surprise, but the Government’s dogged commitment to budget deficit reduction remains the only way to maintain the UK’s AAA credit rating.” Mr Cridland continues to give further analysis:

On the economy: “Debt will peak at a higher level than previously thought but will still be declining by the end of the parliament. The Government is still able to meet both fiscal rules and protect credibility in sovereign debt markets, which is so critical to private sector confidence.”

On infrastructure: “Investing in our infrastructure will act as a stimulus to growth. The projects announced will not just boost immediate activity and jobs, but a longer-term infrastructure plan will support our construction sector in the years to come.

On measures to support energy-intensive industries (EIIs): “The Government has recognised that the UK’s energy-intensive users need help, as a result of the unilateral increases in manufacturing energy costs from the carbon floor price and electricity market reform. We now need to understand how this money will be allocated to those most at risk.”

“It’s vital we keep industries in the UK that produce the steel going into wind turbines, the lubrication that helps their blades turn and the cement that makes their foundations. It’s good that the Government has committed to review the impact of its electricity market reforms on energy-intensive firms.”

On enterprise and innovation: “The commitment to introduce an above-the-line R&D Tax Credit will have a positive impact on the attractiveness of the UK as a place to invest.”

“Extension of the successful Regional Growth Fund by a further £1bn will encourage business investment and create new jobs, particularly in manufacturing.”

“The Government has taken a welcome step in introducing 100% capital allowances in selected Enterprise Zones: “The additional £75m to help small businesses demonstrate new technologies will help firms to commercialise their ideas.”

“Extending the Enterprise Finance Guarantee limit will increase the number of medium-sized firms able to benefit. The new Seed Enterprise Investment Scheme will provide an alternative to bank lending for higher-risk start-up companies.”

On the Green Deal: “The Green Deal should be a win-win, by providing a real boost for manufacturers, installers, and retailers, while helping people save on their energy bills. The Government is right to heed the CBI’s call for incentives, and we should ensure that this money is used to help kick-start the market.”

On support for small and medium-sized firms: “Having a strong mid-sized sector is vital for the long-term health of the economy. The Chancellor’s announcements mark the first step in turning mid-sized firms into a new engine for growth, worth up to £20bn by 2020.”

“The £1bn Business Finance Partnership is an innovative approach to providing mid-sized firms with a broader range of long-term finance options. Additional funds to provide targeted help for mid-sized firms to export could boost their ability to do business overseas.”

On business rates: “Continued business rate relief for smaller firms is another measure that will help drive growth.”

On credit easing: “The National Loan Guarantee scheme is a necessary pre-emptive strike to safeguard bank lending to SMEs. With the pressure on bank balance sheets, this practical and immediate help should bolster business confidence.”

On employment law reform: “The Government’s employment law review is a move in the right direction and should give firms confidence to take on more staff. Businesses up and down the country will welcome changes to employment tribunals but will be looking for tangible evidence of change sooner rather than later.”

On fuel duty: “The cut to the increase in fuel duty will be welcomed by businesses and motorists alike at a time when fuel costs are a real burden.”