Spending Review: CBI urges government to boost economy
The business group wants the government to make this review a ‘catalytic moment for hardwiring the Growth Mission into the heart of Whitehall’.
The CBI, following consultations with hundreds of members and over 20 trade associations, has laid out its desired policy priorities.
They include significant changes and funding to push forward the UK’s growth.
The CBI believes the government should effectively deliver on the Growth Mission’s seven pillars to prompt economic growth.
This involves meeting long-term commitments through meaningful partnerships.
Some of their proposed actions include setting an ambitious goal for UK research and development (R&D) spending to attract investment, strengthening public-private partnerships, and fulfilling the ten-year infrastructure and industrial strategy.
They believe this will boost capital investment by over £100bn in the next five years.
The CBI also wants to see more efforts to help businesses meet current skill needs through a more flexible apprenticeship levy and additional funding for regulators’ capacity.
Louise Hellem, Chief Economist at CBI, said: “The UK stands at a pivotal moment.
“To unlock sustainable growth we must move beyond discussions to accelerate investment through targeted innovation as well as policy and regulatory reforms.”
Ms Hellem also noted that while the government has made significant strides towards the Growth Mission, recent decisions have dented business confidence.
She pointed out that businesses are poised to reduce output and hiring and are passing on cost increases to customers.
Ms Hellem believes that the spending review could serve as a ‘catalytic moment’ for embedding the Growth Mission into the core of Whitehall.
However, she stresses that this requires a serious confidence boost for businesses.
She said: “As an immediate priority, the government should re-commit to not raising the business tax burden further over the course of this Parliament.”
The CBI has put forward a set of recommendations to the government.
They want the UK to become a world leader in innovation and tech adoption, suggesting an ambitious goal to lead the G7 in R&D intensity, with UK R&D spending to be 3.4 per cent of GDP by 2030.
The business group also wants the government to allow businesses to invest 100 per cent of their contributions to the Growth & Skills Levy in both apprenticeship and non-apprenticeship training.
An immediate flexibility in the Apprenticeship Levy to support a broader range of training solutions is also requested.
The CBI acknowledges the government’s recent steps to remove barriers to growth, but believes more needs to be done to attract long-term investment.
They suggest a targeted audit of regulatory costs in high growth sectors and additional funding to shape pro-growth regulations.
The CBI also sees the UK’s ambition to become a clean energy superpower as a major economic opportunity.
However, they warn that high energy costs and regulatory uncertainty are hindering progress.
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To address this, they suggest supporting industrial decarbonisation by linking UK and EU carbon pricing, backing home-grown energy, and providing clear timelines and funding for Carbon, Capture, Usage and Storage projects.
Finally, the CBI believes a clear and competitive industrial and trade strategy is essential to position the UK as a leader in high-growth sectors such as life sciences, financial services, and clean energy.
Ms Hellem concluded: “The CBI looks forward to engaging with HM Treasury and relevant departments ahead of the Spending Review to ensure the government’s Growth Mission translates into real, impactful action, unleashing the UK’s investment and growth potential.”