CBI responds to Osborne’s Budget 2016

The CBI has responded to the Chancellor of the Exchequer’s Budget 2016.

CBI director-general, Carolyn Fairbairn commented: “After a year of surprises, this was a stable Budget for business facing global stormy waters.

Crop - Carolyn Fairbairn, Director General, CBI
Carolyn Fairbairn, director general, CBI.

“The Chancellor has listened to our concerns about the mounting burden on firms and chosen to back business to grow the economy out of the deficit.

Infrastructure

“It’s good to see government preparing the way for the next generation of major UK infrastructure upgrades. Preparation is essential for these projects so that once we take the decision to build we are able to avoid any delays.

“With the digital revolution in full swing, mobile connectivity is one of its key drivers. The decision to follow the advice of CBI members by prioritising 5G on the agenda of the National Infrastructure Commission is a welcome step in fulfilling the UK’s digital ambitions.”

Business rates

“Businesses will welcome the Chancellor’s permanent reforms to business rates – taking more small firms out of the regime and changing the uprating mechanism from RPI to CPI, which the CBI has long been calling for.

You can read the major announcements from the Chancellor’s Budget 2016 here.

“In addition to small firms being taken out of the regime and changes to the uprating mechanism, all companies will welcome more frequent revaluations, which the CBI has long been calling for.”

Support for growing businesses

“The Budget included a number of useful measures to encourage entrepreneurship and growth, particularly cuts to capital gains tax and the extension of Entrepreneurs’ Relief. New allowances for micro-entrepreneurs will encourage participation in the sharing economy and encourage the growth of new and innovative platforms.”

“The reduction in the headline Corporation Tax rate sends out a strong signal that the UK is open for global business investment, and reforms to Interest Deductibility are rightly in line with international consensus.

Energy policy

“The CBI called for the regulatory landscape for business energy efficiency to be simplified. So this is a positive step, focusing efforts on investment and not compliance.

“Extending the current level of the Carbon Price Support in the short term is sensible, as is the commitment to clarify long-term plans for this tax later this year.

“Support for the oil and gas industry is positive – helping key UK employers facing very challenging operating conditions.”

Sugar tax

“Businesses recognise that more needs to be done to tackle childhood obesity. This new ‘sugar tax’ will require proper consultation on how it will work and companies will want assurances that this approach doesn’t represent the thin edge of the wedge.

“Building on the steps they are already taking to reduce sugar in their products, the industry will continue to engage with the Government on effective strategies to address this issue.”

Productivity

“Companies will be surprised to see no further measures to support innovation and R&D in this Budget.  Manufacturers in particular will be looking for further details in the Government’s upcoming National Innovation Plan.”

Regional growth

“Devolution is continuing apace in both rural and urban areas, with positive new announcements from East Anglia to the West of England. As a key player in the Northern Powerhouse, much of Yorkshire remains notably absent from these deals.

“It will be important for both central and local government to focus on creating economic growth. Success will rely on a new era of co-operation between Ministers, local leaders and firms of all sizes and sectors.”