The CBI's 2024 Spring Budget submission
What we’re pushing the government on and why
The 2023 Autumn Statement provided a much-needed boost for business confidence with the delivery of permanent full expensing, and showed the government was responsive to the CBI’s plea to create a better business environment and boost UK investment. As the year ahead still holds many challenges for businesses, it is crucial that the government keeps delivering on its promises and remains focused on promoting sustainable growth.
We sent our submission to the Treasury towards the end of January, ahead of the Spring Budget in March. It aims to push the government to keep making positive progress on the initiatives announced in the autumn, and to deliver smart measures which have a high impact on businesses.
Our submission in brief
The CBI shares the Chancellor’s vision for a more prosperous, high-growth economy. For growth to be sustainable we must avoid persistent high inflation and build resilience in the economy and society while enabling us to play our part in mitigating climate change.
This year will be critical for businesses as they continue to face difficult headwinds, with business investment set to fall by 5% and costs increasing for many businesses through higher Business Rates and the National Living Wage. To unlock the business investment, which is key to sustainable growth, it is essential that this Spring Budget keeps up the momentum to create a more competitive business environment, boosting productivity and raising long-term living standards. This Budget is an opportunity to firm up the foundations of growth and amplify the ambition to make the UK economy the most competitive and trusted destination for investment. Stability and clear detail building on previous announcements would be welcomed by our members.
To help shape and inform the vision and programme of action this country needs to define a future decade of growth, we published our CBI Business Manifesto in December. Co-created with our members it draws on insights from firms in all sectors, and of all sizes from across the UK, and sets out a series of practical, innovative policy solutions.
This fiscal submission focuses on key policy details drawn from this manifesto which the CBI believes will enable the government to maintain crucial momentum for businesses: taking further steps to address labour shortages; establishing a sound business environment; and investing in our high-growth industries.
Summary of top recommendations
Take further steps to tackle labour shortages
The key to the UK’s economic prosperity lies in the health and productivity of its workforce. In many cases, shortages have become so acute and sustained that it is holding back long-term investment and the pace of transformation. Easing shortages is an opportunity to accelerate investment, productivity, and economic growth.
Expand non-taxable health support for employees
Starting by making Employee Assistance Programmes (EAPs) a fully tax-free benefit and making tax relief for medical treatment more preventative.
Deliver the planned expansion of eligibility to 30 hours of funded childcare to help parents increase the hours they work
The staged rollout of expanded eligibility should be closely monitored to ensure that it is equally available to parents in all parts of the country.
Remove barriers to growth and establish a sound business environment
Higher interest rates and subdued demand in 2024 are resulting in a decrease in business investment, which is key to driving sustainable growth. Given these headwinds, the government must keep working to unlock investment and create a more sound business environment by: making the tax system more internationally competitive and limiting cost pressures through tax, increasing foreign direct investment (FDI), addressing blockers to investment through planning reform and infrastructure delivery, and empowering local growth.
Extend full expensing to cover leased and rented assets
Many smaller businesses and those in sectors like construction, logistics, and aviation find it is more cost effective, less risky and greener to lease or rent assets rather than buy them outright. By excluding these assets from permanent full expensing, the tax system can distort behaviour away from the commercially sensible thing to do.
Cap the increase in the England business rate multiplier for another year while inflation is still significantly above target
While inflation remains significantly above target, not doing so would significantly add to the business tax burden and increase consumer prices.
Publish a strategy to deliver the National Infrastructure Commission recommendations
This should incorporate existing strategies adopted by devolved nations and consider blockages from current pressures, as well as opportunities for policy changes.
Invest in our high-growth industries
Innovation is the key to boosting productivity and living standards, and the UK’s strength in innovative, high-growth industries such as green industries, digital, life sciences and advanced manufacturing are world-leading. To support high-growth industries, the UK needs to create the environment for them to flourish. This means ensuring startups, scaleups and large organisations have the access to finance they need to grow and meet demand. It also includes offering them the appropriate incentives to research, develop and commercialise their technologies in this country.
Bring capital expenditure within the scope of R&D
This would move the UK in line with competitors in Ireland and France and encourage businesses to base their long-term investments in the UK.
Establish a Net Zero Investment Plan
This would build on the investment and policy gap work of the Net Zero Council for sector roadmaps, with the intention of crowding in private finance.
Increase the total that can be raised from the Enterprise Investment Scheme (EIS)
By increasing the allowance for Knowledge Intensive Companies (KICs), more R&D intensive scale-ups will be able to grow and successfully commercialise.
Read the full submission for more detail
