Historic budget brings chance for UK-wide surge in investment - CBI

The start of 2020 has seen a welcome lift in business confidence. This historic, first budget of a new decade offers the chance to turn rising optimism into a surge in investment across the UK. It is private sector investment that will lift productivity and enable all parts of the country to share in economic growth. Investment is also the key to building the UK into a global innovation leader.

Business strongly welcomes the Chancellor’s vision to level up communities and lead the way in low-carbon energy and is committed to playing its full part.  Private sector investment has fallen over the past couple of years. This Budget offers the opportunity to reverse this decline through pro-enterprise economic policy.

To achieve this, the CBI recommends a set of practical steps for this Budget. Key proposals include the following:

1. The UK’s business rates system puts many parts of the UK economy at a competitive disadvantage. A comprehensive review should reduce the bill on individual businesses. That review should be completed by year end to incentivise investment by firms across the UK.

2. The Apprenticeship Levy is holding back skills investmentand adding costs and complexity to businesses at a critical time for our economy and the workforce. An extensive review of the levy to ensure it can support a wider range of training should be launched and completed by the next Budget later in 2020

3. The Government’s National Infrastructure Strategy is welcome and should as a first step commit to delivering HS2 in full to unlock capacity and transport connections across the North. It should allocate funds to a wide range of strategic infrastructure projects set out in the CBI’s full submission, including the Midlands Engine Rail, East Coast mainline and Crossrail and channel digital infrastructure funding to hard to reach places

4. Innovation investment drives good jobs and global strength but is currently concentrated in the South. The UK should establish a network of world-class Catapult Quarters in every region of the UK to build on local strengths, develop low carbon zones and support innovation clusters

5. Existing ideas for new US-style Advanced Research Project Agency (ARPA) should be accelerated to create a longer term, high risk approach to investment

6. The R&D tax credit should be increased to 13% from April this year to spur private investment and launch a consultation into widening its scope

7. Vital steps on the UK’s path to Net Zero should be announced, in particular using regulation to ensure that all commercial properties are at least EPC level B by 2030, further develop testbeds for hydrogen deployment which could transform low carbon usage, and fast-track the doubling of  funding for on-street charging points to ensure coverage for electric vehicles across UK by 2024.

Dame Carolyn Fairbairn, Director-General of the CBI, said:

“At the start of this new decade, firms are feeling more optimistic and want to invest. This historic Budget offers the chance to turn rising optimism into a surge in investment across the UK. Backed by a pro-enterprise Budget for skills, infrastructure and innovation, business can help kickstart a new decade of UK growth and job creation.

“And it is investment that will enable all regions of the UK to share in rising prosperity. It will put the UK on track to lead the world in innovation, clean growth and the industries of the future, from AI and robotics to agri-tech and life sciences.

“Trade policy will continue to matter, but with strong domestic policy, British firms are ready to invest and get the UK into the fast lane of global economies.”