CBI full reaction to autumn statement
“Plan A Plus in all but name”
The CBI gave its full reaction to the autumn statement.
John Cridland, CBI Director-General, said:
"This autumn statement works with the realities of today and provides an imaginative framework for UK businesses as it strives to secure growth and jobs. This is "Plan A plus" in all but name.
"The downgraded forecasts and outlook were no surprise, but the Eurozone crisis is still hanging over us. The Government's dogged commitment to budget deficit reduction remains the only way to maintain the UK's triple A credit rating and low interest rates on international money markets."
Commenting further, Mr Cridland added:
On the economy:
"Given the continued uncertainty in the Eurozone, the downgrades to the UK's economic forecasts reflect the current difficulties. Growth will stall through the winter and economic conditions will be weak for some time.
"With spending plans unchanged over the period of the parliament, the Chancellor is sticking to Plan A, and we welcome the reallocation of spending on infrastructure.
"Debt will peak at a higher level than previously thought but will still be declining by the end of the parliament. The Government is still able to meet both fiscal rules and protect credibility in sovereign debt markets, which is so critical to private sector confidence."
"Investing in our infrastructure will act as a stimulus to growth. The projects announced will not just boost immediate activity and jobs, but a longer-term infrastructure plan will support our construction sector in the years to come.
"We've called for new forms of investment to attract up to £200 billion into the UK's infrastructure in the next five years. Making it easier for pension funds to invest in UK infrastructure is a great idea, but we need to get the detail right."
On support for medium-sized firms:
"We are delighted that our campaign to gain support for medium-sized businesses has been heeded and we warmly welcome the Business Finance Partnership and measures to support exports.
"Having a strong mid-sized sector is vital for the long-term health of the economy. The Chancellor's announcements mark the first step in turning mid-sized firms into a new engine for growth, worth up to £20bn by 2020.
"The £1bn Business Finance Partnership is an innovative approach to providing mid-sized firms with a broader range of long-term finance options.
"Additional funds to provide targeted help for mid-sized firms to export could boost their ability to do business overseas."
On credit easing:
"The National Loan Guarantee scheme is a necessary pre-emptive strike to safeguard bank lending to SMEs. With the pressure on bank balance sheets, this practical and immediate help should bolster business confidence."
On measures to support energy-intensive industries (EIIs):
"The Government has recognised that the UK's energy-intensive users need help, as a result of the unilateral increases in manufacturing energy costs from the carbon floor price and electricity market reform. We now need to understand how this money will be allocated to those most at risk.
"It's vital we keep industries in the UK which produce the steel that goes into wind turbines, the lubrication that helps their blades turn and the cement that makes their foundations.
"It's good that the Government has committed to review the impact of its electricity market reforms on energy-intensive firms. Ensuring these industries are included in future energy policy is an important part of the UK continuing to lead the rest of the world on climate change."
On aviation policy:
"We have ambitions to build the UK's export capability and without a world-class hub airport in the South East to service the needs of travellers to all emerging market destinations, this cannot happen. UK businesses will be relieved that the Government has come off the fence on this issue. All options should be closely examined and an informed decision needs to be made as soon as possible."
"Unfreezing the housing market is an important step on the confidence-building ladder. Mortgage indemnity guarantees are the best way to bridge the deposit gap for first-time buyers.
"By encouraging mortgage lenders to offer higher loan-to-value mortgages, the mortgage indemnity guarantee scheme will insure them against their losses if borrowers fail to repay their loans."
On youth unemployment:
"The Youth Contract is excellent news for young people across the country. The Government has developed our idea to incentivise businesses to take on the young unemployed. This will encourage firms to take a chance on inexperienced young people and help tackle the scourge of youth unemployment."
On employment law reform:
"The Government's employment law review is a move in the right direction and should give firms confidence to take on more staff. Businesses up and down the country will welcome changes to employment tribunals but will be looking for tangible evidence of change sooner rather than later."
On enterprise and innovation:
"The commitment to introduce an above-the-lineresearch and development (R&D) tax creditwill have a positive impact on the attractiveness of the UK as a place to invest.
"Extension of the successfulRegional Growth Fundby a further £1bn will encourage business investment and create new jobs, particularly in manufacturing.
"The Government has taken a welcome step in introducing 100% capital allowances in selectedEnterprise Zones.
"The additional £75m to help small businesses demonstrate new technologies will help firms to commercialise their ideas.
"Extending theEnterprise Finance Guaranteelimit will increase the number of medium-sized firms able to benefit.
"The newSeed Enterprise Investment Schemewill provide an alternative to bank lending for higher-risk start-up companies."
On pay and pensions:
"In the light of weak growth, further restraint on pay awards in the public sector is a tough but necessary step.
"In the longer-term, it is essential that pay reflects local labour markets. The Chancellor is right to ask the pay review bodies to explore how this could be done.
On the bank levy:
"Banks must play their part in restoring the public finances, but like any other business they need certainty to help them plan with confidence."
On business rates:
"Continued business rate relief for smaller firms is another measure that will help drive growth."
On fuel duty:
"The cut to the increase in fuel duty will be welcomed by businesses and motorists alike at a time when fuel costs are a real burden."
On the Green Deal:
"The Green Deal should be a win-win, by providing a real boost for manufacturers, installers, and retailers, while helping people save on their energy bills. The Government is right to heed the CBI's call for incentives, and we should ensure that this money is used to help kick-start the market."