This year, the CBI continued to represent UK business on the issues that matter most to our members. We listened to you, and took your asks to government, providing detailed, costed proposals where appropriate and suggesting practical alternatives and solutions to the challenges that affect UK business.
The Spring Budget saw delivery against one ask to help tackle the problem of productivity by removing blockers to parents re-entering the workforce. The CBI made childcare reform – and reducing the spiralling costs – the number one priority for the Spring Budget, and in March, the government confirmed that it would increase funding for existing childcare provision and announced that working parents in England would be able to access 30 hours of free childcare per week.
Likewise, in November’s Autumn Statement the government met one of our core asks on behalf of our members when it made the temporary measure, full expensing, permanent with the Chancellor thanking the CBI when announcing the measure in the House of Commons. The measure allows companies to deduct 100% of qualifying plant and machinery costs from taxable profits.
Read on for information on these wins, as well as the many other ways in which we delivered for our members this year.
Securing permanent full expensing
Since 2021, we've campaigned for full expensing – which allows companies to deduct 100% of qualifying plant and machinery costs from taxable profits – to be made permanent. And in early November, we reiterated our commitment in a joint open letter supported by more than 200 companies and trade associations.
Businesses told us this would help them to make the big changes the country needs: electrifying delivery fleets, updating manufacturing production lines for everything from food to cars, and bringing faster broadband to remote and rural areas.
And in his Autumn Statement on 22 November, the Chancellor delivered on this campaign, highlighting the success of temporary full expensing measures following the pandemic. The Office for Budget Responsibility (OBR) expects the move to lead to a cumulative boost to UK investment of £13.9bn in real terms by 2028/29.
Increasing funding for existing childcare provision
For much of 2022 and early 2023, the CBI lobbied government to reduce spiralling childcare costs which prevent parents from accessing employment and stop working parents – who want to work more – from increasing their hours.
The CBI called on government to create a system of provision that is affordable, accessible and high-quality, by:
- increasing funding into the existing system
- extending existing provision to 1- and 2-year-olds
- and changing the Universal Credit System so that childcare support is paid up front, rather than in arrears.
In the Spring Budget in March, the government confirmed that it would increase funding for existing childcare provision – announcing that working parents in England would be able to access 30 hours of free childcare per week for 38 weeks of the year. The provision starts when their child is 9 months old and ends when they start school. The new offer will be rolled out in stages from April 2024 to September 2025.
Supporting grid connectivity
In our September submission to HM Treasury, we asked the Chancellor to cut the time it takes to build electricity transmission infrastructure and obtain connections to the grid. The more-than-a-decade connection time that energy and renewable projects often face in the UK significantly deters investors, especially given far shorter wait times in competitor markets.
In the Autumn Statement, the Chancellor announced a reform of the grid connection process to cut waiting times – including freeing up over 100GW of capacity so that projects can connect sooner.
Creating a new, simplified R&D tax credit scheme
Throughout the Treasury's review of R&D tax reliefs, the CBI pushed the Chancellor to introduce a new R&D tax credit scheme that would be simple, certain and would drive investment from innovative businesses of all sizes.
The UK has thriving life sciences and tech sectors, producing everything from the COVID vaccines to the latest developments in web search AI. R&D tax credits have been instrumental in funding many of these ideas in their early stages, but the UK system has fallen behind in two ways: cover for capital expenditure and social sciences (both vital for anchoring investment in the UK and competing with other jurisdictions, like France and Ireland) and in the complexity of the system, driving uncertainty for business.
The Autumn Statement in November laid out a new, simplified R&D scheme, reducing the number of schemes from three to two and providing support for R&D intensive and loss-making companies to meet those aims.
Pushing the government to join Horizon Europe
In March, the CBI, along with representatives of the UK and wider European research, innovation and business communities, signed a joint statement pushing for finalisation of the UK’s association to Horizon Europe.
The business community saw participation in Horizon Europe as a key priority. The networks, international partnerships and opportunities to shape direction of research all offered by Horizon Europe association are unique and would be extremely difficult to replicate within the UK.
The joint statement urged the government to associate the UK with Horizon Europe as soon as possible, and gave clear evidence of business's, as well as the broader UK innovation sector’s, position on the value of Horizon Europe to the UK.
On 7 September, the UK joined Horizon Europe under a new bespoke deal.
Other areas where the CBI had impact:
Delivering in the devolved nations
Across the devolved nations, the CBI delivered impactful change for business. In Scotland, the CBI were a leading voice, submitting a response with key case studies and input from members, against plans to introduce restrictive alcohol advertising legislation. This would have incurred significant costs for retailers and producers, and challenged the UK Internal Market. The Scottish Government went on to announce a pause to these plans.
The rollout of the Deposit Return Scheme (DRS) in Scotland was facing a serious implementation challenge, with businesses set to create separate labelling and product lines for Scotland-only sales. Businesses were behind the aims of the scheme, but with a lack of flexibility from government, firms were facing considerable bills, and barriers to trade. The CBI – both publicly and privately – argued strongly that the existing scheme was not workable. The Scottish Government have since paused the scheme, with plans to roll it out in line with other parts of the UK in 2025.
In Northern Ireland, the CBI was a key partner in the implementation of the Windsor Framework, working with members to highlight operational challenges in the new framework. From this, the CBI could effectively collaborate with officials to design practical solutions, to ensure the smooth operation of the new rules.
Whilst in Wales, the CBI are a key partner with government, sitting on the newly formed Social Partnership Council ensuring the voice of business is at the heart of the Welsh Government’s work on public procurement.
Making the UK a more attractive place for foreign direct investment
The CBI submitted a response to the Harrington Review of Foreign Direct Investment in Summer 2023. We welcomed the launch of the review in March as it was an acknowledgement that the UK needs to be more competitive when attracting and retaining FDI on the global stage.
While the UK remains a good place to invest, there has been a weakening in some structural areas of the economy, and supporting new and existing investors is vital for UK competitiveness. Therefore, we welcome the publication of the Review and look forward to working closely with government on the next steps.
We particularly welcome the government response and acceptance in principle of the headline recommendations, which are based upon key recommendations put forward by the CBI on behalf of our members, including improved collaboration through a stronger framework at regional and devolved level.
Encouraging technology adoption
The CBI has long asked for a national rollout of the Made Smarter advanced manufacturing technology adoption programme. Such programmes are crucial for UK businesses to effectively adopt technology to improve productivity and tackle labour shortages.
In the Autumn Statement, the government announced the rollout of the scheme, with £100m worth of funding over four years.
Advocating for a change of approach to Retained EU Law
The CBI wrote to senior government representatives in Spring 2023 to advocate for a change of approach to that outlined in the Retained EU Law Bill (REUL). The Bill originally proposed to ‘sunset’ all 2,500 pieces of EU retained law at the end of 2023 if not otherwise retained, restated or revoked. This raised several serious concerns.
In our letter, we produced a ‘sector dashboard’ following our Q1 Regional Council round to highlight the risks of continuing with the automatic sunset approach.
And in May, the government announced a change of approach to instead focus on a more targeted grouping of secondary legislation for repeal.
Changing employment law regulations
In May, the government announced it would consult on changes to the Working Time Directive (WTR) and Transfer of Undertakings (Protection of Employment) (TUPE) as part of its renewed approach to the Retained EU Law Bill.
The CBI discussed with officials and submitted a response, which resulted in practical changes that would benefit businesses, including:
- On the WTR, rolling up EU and UK leave into a single entitlement, which is far easier to manage from a business administrative perspective
- On the TUPE framework, ensuring that SMEs with fewer than 50 employees – or where the transfer impacts fewer than 10 employees – don’t have to elect representatives for collective consultation. This means that these businesses can instead conduct employee outreach in a more ‘size appropriate’ manner.
Boosting support for AI and digital
The CBI’s submission to the Vallance Review – which investigated how to boost pro-innovation regulation for digital technologies – recommended that the government establish an advisory service to help businesses launch AI and digital innovations.
On 19 September, the government announced a new advisory service to launch in 2024, which helps new products and innovations reach the market quickly, safely and responsibly, including £2m of government funding.
Unblocking resource for planning
The CBI had consistently flagged to government – including through its Spring Budget Submission – the need for additional resourcing for planning. Providing greater support for planning authorities to recruit and retain planning officers would give developers greater certainty and would increase the speed of delivery of housing and vital infrastructure.
And on 24 July, Secretary of State for Levelling Up, Housing and Communities, Michael Gove announced that the government would double its funding to deal with planning backlogs – meaning over £24m of additional investment. In addition, he announced the creation of a new ‘supersquad’ of expert planners alongside £13m of new funding to unblock major housing and infrastructure developments.