CBI calls on Chancellor to extend policies for growth

The CBI, representing 190,000 UK businesses, has called on the Chancellor to extend a number of economic policies and avoid low-growth as the country recovers after the Covid-19 pandemic.

The organisation has estimated that targeting 2.5% growth for post-pandemic recovery could add £100 billion to the Treasury by 2030, as opposed to the 1.3-1.7% currently predicted by the Office for Budget Responsibility (OBR).

Ahead of Chancellor Rishi Sunak’s Spring Statement in April, the CBI has set out a number of policies aimed at driving up economic growth rates and tackling low productivity in the UK’s businesses. Their suggestions include better incentives for businesses to invest in training and apprenticeships, grants for low-carbon and energy efficient technology to help businesses overcome high energy prices and grow the green economy, and make permanent the investment deduction available to businesses in order to mitigate the economic impact of a rise in corporation tax.

CBI Director General Tony Danker said: 

“Business backs the Chancellor’s desire to foster a renewed culture of enterprise and deliver a more ambitious growth rate. His vision set out only last week to leverage the tax and regulatory system to promote business investment, upskill Britain’s workforce and stimulate innovation is the right recipe for future success.  

“Faced with a record tax burden, a cost-of-living crisis, wage pressures and the end of the super-deduction, firms will be looking to the Spring Statement for a clear signal that the government’s ambition will be matched by action.  

“That is the time to act if we want to push the economy onto a higher growth trajectory. It takes time for policies to kick in and deliver results, so there’s no point in waiting until an autumn Budget. Without serious action, we risk the economy simply drifting towards low growth once the V-shape bounce ends. The Government cannot waste a single moment. 

“We all share the vision of a more sustainable and competitive economy that can pay down its debts and invest in public services. But that means backing business and going all-in on the UK’s strengths. Fail to act immediately on flatlining growth and we risk that brighter future slipping through our fingers.” 

The CBI is urging the Chancellor to use the upcoming Spring Statement as a ‘launchpad’ for stronger growth. Without a permanent investment incentive to replace the super-deduction, for example, the organisation warns the UK will remain bottom for business investment among the G7 in 2026.