Plans outlined for the future of UK prosperity

Posted on 7 Feb 2017 by Fred Tongue

The CBI has published a Budget proposal that outlines three key areas for prosperity in the UK over the long-term.

The Confederation of British Industry (CBI) has recommended that the government backs the growth ambitions of businesses’ in order for the UK to prosper. The organisation has written a budget submission letter, which highlights stability and government working in partnership with business as key areas to focus on. The letter also welcomes the introduction of an industrial strategy.

The business priorities in the CBI’s budget submission include committing a funding plan for high-value technical education for 16-18 year olds, building on the success of the R&D tax credit schemes and tackling the UK’s Business Rates regime. The letter also calls for the government to make sure it doesn’t add to the mounting costs of conducting business in the UK.

Rain Newton-Smith, CBI Chief Economist, said, “prioritising stability will inject further confidence in the economy now, and help boost the country’s productivity and prosperity for the future.

“While the economy has proved resilient, inflation is rising and growth is set to slow. As uncertainty around the manner of our EU exit dampens investment and higher inflation erodes consumer spending growth, the Government must show that it is serious about supporting companies to invest, to help our regions and nations prosper.

“The Government’s industrial strategy provides a significant opportunity to build a long-term modern economy as the foundation for a prosperous, fairer and more inclusive society.”

Rain Newton-Smith, director of Economics, CBI
Rain Newton-Smith, director of Economics, CBI.

One of the three main issues the CBI addresses in the letter is ensuring that businesses can succeed in the current climate of economic uncertainty. The threat of inflation alongside the costs of the national living wage, the apprenticeship levy and other business costs is chief among the organisation’s concerns. In order to achieve a successful business environment the CBI recommends clarity on long-term intentions for financial services taxation, a review into the scope of capital allowances, immediate action to underpin stability in firms’ defined benefit pensions and that the government freezes the remaining long-haul band of emergency air passenger duty to support exports and inward investment.

Secondly the CBI recommends making the UK a more attractive place to do business. In order to do this it recommends greater detail on how the National Productivity Investment Fund will be spent, including the £2 billion on R&D, and make the best use of existing facilities like Innovate UK. Other recommendations include, prioritising delivery of the planned local and digital infrastructure projects and providing timelines, committing to stability in Insurance Premium Tax (IPT) for the rest of the parliament and providing a long-term, stable, transparent and cost-efficient framework for energy policy.

The last of the CBI’s three major recommendations focuses on improving growth and output through investing in education and skills. Some of the recommendations include incentivising STEM students to become teachers by offering grants, introducing career leaders in every school, funding pupil’s core digital skills and boost funding for opportunity areas to improve social mobility for rural and coastal areas. The CBI also recommended that the first two years of the apprenticeship levy should be a transitional period while delivering a genuinely employer-led system.

Speaking about the education and skills recommendations, Neil Carberry CBI director for people and skills policy said, “we know that improving schools is the best long-term growth strategy a nation can have. While in many areas schools have made impressive improvements in recent years, too many regions are left behind and too many young people still don’t get the education they need.

“Funding for effective delivery of high quality technical education is essential for our future competitiveness.  Alongside this, careers leader in every school and targeted action in key places through the opportunity areas scheme will build a platform for deeper co-operation between education and companies.”