The CBI has demanded that Philip Hammond use the budget on 29 October to prepare companies for a post-Brexit future with a £2bn package of measures to bolster investment, raise skills and ease the burden of business rates.
The employers’ organisation said action was needed to lift Britain from the bottom of the G7 league table and it was time for the chancellor to “put warm words for business into action – no ifs, no buts.”
As Hammond prepared to deliver the last budget before the UK leaves the EU, the CBI’s submission to the Treasury said he should use it as an opportunity to tackle Brexit uncertainty.
It urged the chancellor to raise the annual investment allowance from £200,000 to £500,000 for two years and to look at ways of increasing capital spending in the technology sector.
Carolyn Fairbairn, the CBI’s director general, said: “As we near the end of Brexit negotiations, the world’s gaze is fixed on these shores. This budget is a pivotal moment and chance to showcase the UK as an open, collaborative and confident nation. Entrepreneurs here and around the world need to see a UK committed to harnessing the power of business to innovate and tackle problems, from sustainability to inequality.
“The government must focus its attention on making the UK a shining beacon of enterprise, at the top of every investment league table and known worldwide as a country that attracts, not deters, capital and talent.”
The CBI said investment would be helped by changes to business rates. It called on Hammond to provide a year’s relief for businesses that renovated a factory, office or store and to make it possible for firms to benefit immediately from lower business rates when property prices fall.
Hammond signalled last week that he would change the apprenticeship levy after lobbying from employers’ groups. The CBI said the budget should make it easier for small and medium-sized enterprises to access funds from the levy.
Fairbairn said: “By investing in workers, equipment and, crucially, digital and new technologies, the UK can establish itself in pole position for the future. This is also the best way to raise productivity and prosperity in all corners of the country.”
The CBI director general accepted that the failure of businesses to invest was a longstanding problem, but added: “This is not because they don’t want to invest, but because the conditions are so often not conducive to doing so.”
The CBI said its proposed measures would costs just over £1.5bn in 2019-20 and £2bn in 2020-21, whichamounted to less than 0.2% of official forecasts for government spending.
