The CBI has warned government that regulation and planning constraints are detracting from UK potential as a top destination for inward investment.
CBI director general John Cridland presented a lengthy set of recommendations to government on Monday on how to make the UK economy more attractive. In his call to action Cridland stated: “Time isn’t on our side and we have less than five years to turn things around.”
This urgent state of affairs for British industry follows on significant decline in foreign investments in the UK between 2007 and 2009. Cridland continued: “We want the UK to be the best place for companies to invest because this is how we will create growth and jobs.
“But it is worrying how many business leaders are telling us that the UK no longer holds the same attraction it once did, and are questioning whether they need to be here at all.”
Cridland said that it was time for government to: “completely transform the investment landscape… With competition for international capital so fierce, the government must play up our strengths and remove the stumbling blocks to investment”.
Tax cuts were a major element of the changes called for by the CBI, including the further reduction of corporation tax to 18% and the abolition of the 50 pence income tax band.
The leading industry body’s suggestions were echoed by other trade associations and sector representatives. Terry Jones, the Food and Drink Federation’s director of communications, said: “We applaud the CBI’s ambitious and yet realistic vision for UK business. Sustained and strong growth by sectors such as food and drink manufacturing relies on domestic and international investment and we must have the right environment to attract foreign investors.
“The CBI’s eight point plan for government mirrors many of our recommendations to increase competiveness. We are making progress against those priorities with Government but as today’s report makes clear, international competition is fierce and decisive action is now required.”
The key drivers for the eight oint plan mentioned by by Jones are listed below:
• Open up more public services to private provision
• Accelerate the transition to a low-carbon economy
• Speed up the regulatory process for clinical drug trials
• Support further business-led academies and apprenticeships
• Build greater resilience into the UK’s infrastructure, particularly better broadband
• Create fast-track processes for planning.
Andreas Goss, head of German engineering firm Siemens in the UK, lent his support to the CBI’s advice along with 400 UK firms who took part in a CBI suvey. “Our investment decisions are taken with a long-term view, so stability of government commitment is important,” said Goss, who was critical of the lack of engineering and science skills in the country.
Other testimonials from industry backing the CBI eight point plan include comments made by Amanda Sourry, Chaiman, Unilever UK & Ireland. She stated: ““It is absolutely critical to the long-term success and competitiveness of the UK economy that a more compelling business case be built to encourage investment here.”