Investment is an enabler of economic growth, but the UK underperforms on business investment: the UK is at bottom of the G7 league table and the gap has widened. With the G7 riding off into the distance, how can the UK catch up? Tax policy is one way the government can stimulate business investment.
Productivity growth matters since it leads to sustainable growth, better standards of living, and greater global competitiveness. For businesses, productivity matters because it determines how much they can pay their staff, how quickly they can grow and what they can invest in. Investment is a key enabler of economic growth both now and in the future.
Higher rates of business investment drive future productivity growth and higher standards of living. But the UK underperforms relative to its international peers on levels of business investment, as this report shows. The present value of the UK’s capital allowances regime is only 46% co