Act now to stabilise business confidence and growth
The CBI is calling on the chancellor to use his Spring Statement to stabilise business confidence and get firms investing by doubling down on green energy and creating a permanent investment deduction.
Making homes and commercial buildings more energy efficient would help reduce demand from sources overseas, reduce emissions and spur investment. And setting out a Contracts for Difference model on hydrogen could keep us ahead of international rivals in a new green market.
With cost pressures mounting for firms and confidence wavering, the UK’s leading business group says ‘the time for action is now’ on measures to put the economy on a higher growth trajectory.
Amidst geopolitical turmoil, a cost-of-living crisis and the lingering impact of the pandemic, Tony Danker is urging the chancellor to deliver on his Mais Lecture vision of a ‘high growth, low tax economy built on a new culture of enterprise’ – otherwise, it will disappear into the rear-view mirror if action isn’t taken to stabilise business confidence immediately.
Ahead of the Spring Statement and new energy supply strategy, the CBI has also called for a series of urgent measures to help businesses and consumers in the face of short-term uncertainty and rising inflation, including:
- Maintaining and expanding the Recovery Loan Scheme until the end of 2022.
- Reducing network costs for Energy Intensive Industries (EIIs) and increase their level of renewable levy exemptions in line with international competitors.
- Setting out support for low-income households to address cost of living pressures.
Tony Danker, CBI director-general, said: “With economic turbulence meaning a rocky spell in recent months, the time for action is now to not only mitigate as best we can, but also set the UK on a higher trajectory of economic growth. The chancellor may have wanted to delay taking decisive moves on the economy but that no longer makes sense.
“Despite labour shortages, rising cost pressures and supply chain disruption, most firms still had growth and much-needed investment firmly in their sights.
“But the tragic outbreak of war in Ukraine threatens to sap that post-pandemic optimism. This is a chance for the chancellor to signal that the UK can continue to grow independent of Putin’s actions.
“With expected tax rises also thrown into the mix, all-important investment plans could be shelved unless we act to boost confidence. That’s why we need a substantive and permanent replacement for the successful super-deduction.
“The chancellor must put growth and economic resilience front of mind when delivering his Spring Statement. We must leverage North Sea production as we manage our energy transition, but we also need to now go full throttle in pursuit of green growth. It was always good for humanity but it’s now essential for national security. It’s also the greatest economic opportunity for businesses to thrive and to level up the United Kingdom.”