23 November 2016

  |  CBI Press Team

Update

Full Autumn Statement 2016 reaction

Read the CBI's full response to the first Autumn Statement since the EU referendum.

Full Autumn Statement 2016 reaction

Carolyn Fairbairn, CBI Director-General, said:

“The Chancellor has prioritised a pragmatic down payment on future productivity growth.  His emphasis on R&D, housing and local infrastructure will help businesses in all corners of the UK to invest with greater confidence for the long-term, during turbulent times.  This will be warmly welcomed.

“These measures must now be translated into action.  That means tarmac, tracks and telecoms being laid, and clear, deliverable timetables for major projects – only then will they act as a catalyst for investment, jobs and growth.

“Reducing the frequency of fiscal events along with the commitment to stick with the tax roadmap will provide stability for businesses.  Importantly, the new fiscal rules provide the Government with welcome flexibility, while remaining prudent, in uncertain times. 

“The Government is right to accept the independent Low Pay Commission recommendations, as firms want to see affordable rises in the minimum wage that protect the low paid and avoid damaging job prospects. 

“The Chancellor should keep a watching brief on the challenges created by higher inflation and uncertainty weighing on near-term business investment.”

On business rates:

“While positive action has been taken on transitional relief, and excluding new fibre investments, retailers and manufacturers in particular will be disappointed by the Chancellor’s limited moves to address the growing burden of business rates.”

On infrastructure and energy:

“73% of all businesses see tackling road congestion as important. Therefore further investment in local road networks, in particular congestion ‘pinch points’, will help improve productivity by reducing the time spent in traffic jams. We know that widening labour market access by improving travel times to work has a real impact on local productivity.

“Having maintained the freeze to the Carbon Price Support, government must continue a close dialogue with industry to forge a clear long-term carbon price trajectory. Additionally, firms will be looking for clarity on the future of the Levy Control Framework in Budget 2017.”

On digital:

“The UK already has good digital infrastructure, but we can’t rest on our laurels. Requirements for better internet access will only grow with the adoption of new technologies. The Government’s commitment to faster and more reliable broadband should support business growth and productivity improvements across the UK.”

On innovation:

“These announcements give further details on the Government’s ambitious plans to bolster innovation spending, which amount to the largest increase since 1979. The development of an evidence-based Industrial Strategy Challenge Fund, alongside additional funding for research and Innovate UK grants, make clear that Government has recognised the central role science and innovation play in growing a modern, productive economy.

“Further funding for venture capital through the British Business Bank will be positive for the overall innovation ecosystem, helping start-ups to scale up. Ultimately, business will be keen to work with government to raise our overall level of R&D spend towards 3% of GDP. We look forward to working with the Government on the forthcoming R&D tax credit review.”

On housing:

“Increasing affordable housing supply through additional funds and relaxing rules for housing associations will make an important contribution to tackling the UK’s housing shortage. A Housing Infrastructure Fund is also a welcome measure to unlock housebuilding by linking new homes with the provision of supporting infrastructure.”

On productivity:

“Businesses know that they can do more to increase productivity growth by working collaboratively. The support the Chancellor has offered for Sir Charlie Mayfield’s Productivity Leadership Group will help us build on this partnership approach.

“Improving our export performance and attractiveness as a destination for foreign direct investment is crucial to growth, productivity and innovation. Greater support from UK Export Finance will help firms looking to expand into new markets, and extra funding for the Foreign Office and Department for International Trade comes at a critical time as they develop their expertise in supporting international business.”

On Insurance Premium Tax:

“IPT has increased four times since 2010 and more than doubled from 5% in 2010 to the announced increase to 12% in 2017. These changes are disruptive to business and inconsistent with tax stability.”

On National Insurance Contributions:

“Tax simplification is the right goal, but by aligning NICs thresholds the Chancellor has added another cost for employers.”

On salary sacrifice:

“While exempting important areas like pensions and childcare, this measure sends the wrong signal to companies wanting to invest more in employee health and wellbeing.”

On National Living Wage:

“Businesses want to see a rising minimum wage that protects the low paid, but increases must also be sustainable for employers if we are to avoid damage to job prospects for lower skilled workers.

“By accepting the recommendation of the independent Low Pay Commission today, the Chancellor has shown he also supports this balance. In the face of economic uncertainty, relying on the expert guidance of the LPC is the right call - and we welcome the Commission's statement that it will continue to be guided by performance on jobs, alongside any political targets, in setting the rate.”