28 February 2021
Ahead of Wednesday’s Budget, the CBI has outlined three bold moves the Chancellor can make that would support the Prime Minister’s roadmap and give businesses the boost they need to bring the country back to growth.
Alongside an extension of Covid-19 business support measures, including the successful Job Retention Scheme, the Chancellor is being urged to focus on policies that will catalyse business investment in key areas like skills, jobs and innovation. Businesses will also be looking to the Chancellor to incentivise green investment to set us firmly on the path to net zero.
With businesses still in emergency mode, firms are also sounding alarm bells that any significant tax rises in the short-term would stifle their ability to invest, hamper UK competitiveness and hold back our recovery, just when we need them firing on all cylinders.
The three key areas identified by the CBI include:
- Protecting jobs, firms and livelihoods in the immediate term by extending furlough, providing further VAT deferrals and giving firms (including in vital supply chains) a further business rates holiday.
- Get businesses investing, by using incentives to spur investment in skills, jobs and innovation. This includes vouchers to get SMEs investing in digital technologies; unlocking investment in training by reforming the Apprenticeship Levy; and setting up the new National Infrastructure Bank to crowd-in investment.
- Provide the vision for a long-term plan for economic growth. From green investment incentives to laying the groundwork for a fundamental reform of the unfair and uncompetitive business rates system, businesses want to a signal of intent about the future of the economy.
Rain Newton Smith, CBI Chief Economist, said:
“This is a Budget like no other, with many businesses still on their knees after the devastating impact of the pandemic. The Prime Minister’s roadmap for easing restrictions and the Chancellor’s forthcoming Budget represents two parts of the same story – bookending the immediate Covid-19 crisis by relieving firms under pressure and setting the economy on a path to recovery.
“But this can’t just be about the here and now. We need to match the urgent need to protect jobs and firms with giving everyone a glimpse of an ambitious vision for the future of the economy. That means giving firms the confidence they need to invest by committing to the kind of pro-business environment that would help them to compete with the world’s best.
“Consumption and government spending alone can’t set us on the path to recovery. We need a dynamic and competitive business community powering us forward. That means avoiding any moves in the short-term that would hold business back from doing what it does best: innovating, creating jobs and delivering greater prosperity for all.”