Wholesale review key to ‘levelling up’ UK economy, says CBI

Posted on 10 Feb 2020 by The Manufacturer

A wholesale review of business rates and a country-wide network of Catapult clusters backed up by a “pro-enterprise economic policy”, are among a raft of measures the Confederation of British Industry has submitted to the Chancellor of the Exchequer ahead of his 2020 Budget.

Budget Annual Investment Allowance Finance Money Cash Growth - image courtesy of Depositphotos.

Boosting investment in the private sector to raise productivity levels across the UK should factor into the government’s Spring statement set to be announced on 11 March 2020.

That’s according to a formal letter to the Treasury Department, in which the CBI urges Sajid Javid to turn rising business optimism into a “surge” in investment across the UK.

The CBI welcomed the British government’s vision for “levelling up” all UK regions lagging behind London and some of the more prosperous home counties in terms of innovation and vital infrastructure, recommending seven key proposals which it believes will lead to shared economic growth.

The UK business organisation, which in total claims to speak for 190,000 businesses, branded the imminent Budget a “momentous” one in light of a “tough” three years for the British economy, adding that decisive action by the UK government would help reinforce a rebound in business confidence it had witnessed since the start of 2020.

It added that “bold action on skills, net zero, innovation and infrastructure can kick-start new decade of growth and investment”.

CBI seven key proposals to boost productivity

  • Business rates put parts of the UK economy at a “competitive disadvantage” and a wholesale review completed inside one year should reduce the burden on individual firms, leading to incentivisation.
  • A review of the Apprenticeship Levy to ensure it can support a wider range of training should be introduced, because  it currently inhibits investment in skills and adds “costs and complexity to businesses at a critical time”.
  • The first step of the government’s National Infrastructure Strategy should be to deliver HS2 in full, “unlocking capacity and transport connections across the North”. This should be followed by wider funding for a range of strategic infrastructure, including the Midlands Engine Rail, East Coast mainline and Crossrail, with additional digital infrastructure funding to less well-connected regions.
  • A network of “Catapult Quarters” should be established to drive innovation in every region of the UK as well as the South, capitalising on local strengths, developing low carbon zones and supporting innovation clusters.
  • Existing ideas for a new US-style Advanced Research Project Agency (ARPA) should be accelerated to create a longer term, high risk approach to investment
  • The R&D tax credit should be increased to 13% from April 2020 to encourage private investment
  • Regulation should be introduced that stipulates all commercial properties are as a minimum Energy Performance Certificate (EPC) level B by 2030, while encouraging development of testbeds for hydrogen deployment to transform low carbon usage, and streamlining a doubling of funding for on-street EV charging points across the UK to ensure coverage by 2024

“At the start of this new decade, firms are feeling more optimistic and want to invest,” said Dame Carolyn Fairbairn, director-general of the CBI. “This historic Budget offers the chance to turn rising optimism into a surge in investment across the UK. Backed by a pro-enterprise Budget for skills, infrastructure and innovation, business can help kick-start a new decade of UK growth and job creation.

“And it is investment that will enable all regions of the UK to share in rising prosperity. It will put the UK on track to lead the world in innovation, clean growth and the industries of the future, from AI and robotics to agri-tech and life sciences.

“Trade policy will continue to matter, but with strong domestic policy, British firms are ready to invest and get the UK into the fast lane of global economies,” she added.

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*Image courtesy of Depositphotos