Budget choices will determine success of UK’s growth mission – CBI Budget submission

With just weeks until the UK Budget, the CBI is urging the Chancellor to make the bold decisions necessary to get the economy firing.

Businesses will judge the Budget a success or failure based on its ability to inject immediate momentum into a stuttering economy, and whether it gives firms and consumers confidence that the government has prioritised long-term prosperity over short-term thinking.

Every decision made this month must be taken in the interests of the UK’s growth mission, with action firmly focused on reform, simplification and alignment of incentives to boost business investment and job creation. The CBI has identified some immediate steps the Chancellor can take to chart a decisive path back to sustained growth in its latest Budget submission – with a focus on fast-tracking infrastructure, boosting competitiveness, upskilling our workforce and adopting technology and innovation.

The government must also show it is ready to make the strategic decisions needed to take the country forward. That means accepting that hard choices must be made – without leaving the door ajar to further unwelcome tax changes in Spring. ‘Death by a thousand taxes’ is not a credible way to deliver a thriving, prosperous economy.

With business tax at a 25-year high, firms are clear that they cannot endure a repeat of last year’s cost raising Budget. The Chancellor has to be prepared to challenge party orthodoxy and take difficult decisions to deliver the long-term stability and growth the country needs. Given the urgency of the situation, nothing can be considered ‘off-the-table' - including unpopular moves in areas like personal tax, public spending, welfare provision and pension increases.

Rain Newton-Smith, CBI Chief Executive, said: 

“The government deserves huge credit for recognising the challenges faced by the economy and for showing determination to chart a course towards renewal that prioritises both public and private investment. But the goal of a growing economy that raises living standards across the board won’t be achieved until real fiscal headroom is created and the cycle of short-term thinking that’s holding the country back is broken. 

“Yearly tinkering to close an ever-increasing fiscal gap simply isn’t a viable approach to a challenge this big. We need to take tough decisions now or risk a downward spiral that sees us robbing Peter to pay Paul just to fund normal government expenditure and puts our growth prospects in peril. Short-term thinking leads to long-term decline, let’s not make that a political choice we live to regret. 

“Sticking rigidly to manifesto commitments may be politically laudable, but its only economically viable if material conditions remain unchanged. The fact is they are not. Tax rises and spending cuts are unpopular, but the reality is that the Chancellor faces little choice. We need to make sure that these measures are fair, broad-based and have a laser-like focus on raising investment, growth and productivity for the long term.” 

The private sector stands ready to play its part in the growth mission through increased investment, innovation and job creation. But battles against rising costs, overreaching regulation and short-term thinking have left their hands tied, with business confidence and investment stalling as a result.

The CBI outlines four key, growth-boosting, areas that can be done right now to set the economy back on the path to long-term sustainable growth and jump start delivery:

(1) Fast track critical infrastructure through primary legislation.  

• Hire an additional 600 planners to deliver a liberalised planning system.
• Prioritise projects like Northern Powerhouse Rail, Acorn CCUS, the Docklands Light Railway extension and others that can catalyse jobs and investment now.
• Deliver the next generation of public-private partnership models to get private money and expertise working for the public good.

(2) Focus on skills delivery to maximise our workforce potential.   

• Find a landing zone for the Employment Rights Bill that doesn’t harm job prospects or shortchange economic growth.
• Scrap plans to introduce an International Student Income Levy.
• Deliver 100% flexibility for the Growth and Skills Levy.

(3) Harness the best in innovation and technology to modernise our economy. 

• Scale technology by leading the development of a national technology adoption plan and delivering technology adoption support for all sectors of the economy.
• Expand R&D tax credits to include capital spending.
• Use government procurement as a strategic lever to scale innovation by embedding Contracts for Innovation and expanding Commercial Innovation Hub trials.

(4) Deliver policy with a relentless focus on improving competitiveness. 

• Address the UK’s disproportionately high energy costs by supporting a targeted discount scheme that enables electrification of processes.
• Provide the resources required to help businesses unlock exporting opportunities.
• Improve the liquidity of the London Stock Exchange, including through the removal of Stamp Duty on Shares and the Stamp Duty Reserve Tax.

Louise Hellem, CBI Chief Economist, said: 

“As the Budget approaches, there’s an overwhelming sense of a country, and an economy, in stasis. Strategies have been designed and debated, but action has lagged behind – leaving business confidence to ebb and investment to stall. This has only been exacerbated by rising business costs and growing uncertainty caused by policies like the Employment Rights Bill.  

“Everyone wants to see living standards rise and more money in people’s pockets, but higher wages just lead to higher costs unless we address the UK’s long-term productivity challenge.  

“We need to be relentless in our quest to deliver a modern economy that champions innovation and rapidly adopts new and emerging technologies. This must be underpinned by a flexible and responsive skills system that is not only calibrated to business need, but that offers first class training and rewarding career opportunities for people in every part of the country. 

“As the government identified in its Industrial Strategy, high energy costs are crippling firms and making them less competitive internationally. Businesses need to see further action alongside speeding-up the process for approving and delivering critical, growth-boosting, infrastructure projects.”

Read the full Autumn Budget 2025 submission here