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CBI response to Budget

CBI yesterday responded to the Budget.

Tony Danker, CBI Director-General yesterday said:

“This Budget succeeds strongly in protecting the economy now and kickstarting recovery. It leaves open the question of UK competitiveness long term.

“The Chancellor has gone above and beyond to protect UK businesses and people’s livelihoods through the crisis and get firms spending.

“Thousands of firms will be relieved to receive support to finish the job and get through the coming months. The Budget also has a clear eye to the future; to ensure finances are sustainable, while building confidence and investment in a lasting recovery.

“The Chancellor has taken a welcome, broad view on how to stimulate growth from the new Infrastructure Bank, to Help to Grow and incentives to take on apprentices.

“The super deduction should be a real catalyst for firms to greenlight investment decisions. The boldness of the Chancellor on this measure is to be admired.

“But moving Corporation Tax to 25% in one leap will cause a sharp intake of breath for many businesses and sends a worrying signal to those planning to invest in the UK.

“The government must now have a laser-like focus on the UK’s competitive position in the round, including fundamental reform of the unfair Business Rates system. The UK must remain attractive for every type of business, from the innovation, high-growth UK homegrown firm to the global firms investing in the UK. We look forward to working with the government to achieve this.”

Further detail on specific measures.

On Covid support, Rain Newton-Smith, CBI Chief Economist, yesterday said:

“The Chancellor unveiled a series of important business support measures that will provide vital room for firms, cushioning them until demand returns to offices and high streets across the country. That included an extension of the Job Retention Scheme that will keep millions more in work as we carefully exit lockdown.

“The new Recovery Loan scheme will come as a huge relief to firms worried about the conclusion of the business interruption and bounce back loans. The further announcement of re-start grants to help hospitality, non-essential retail and tourism firms re-open their doors will remove some of the anxieties small firms have about the costs they face. But there is still little support for businesses in their supply chains who don’t qualify automatically and will have to apply for a smaller pool of support.

“For a beleaguered aviation industry that has been ravaged by the pandemic, the extension of support for airports is welcome – particularly with significant uncertainty still remaining over the vital summer holiday season. However with fixed costs high and passenger numbers likely to take some time to recover, these measures alone won’t be enough to help the sector overcome the significant challenges in the months ahead.”

On the recovery, she yesterday said:

“Looking ahead, the Chancellor also announced a number of innovative measures aimed at boosting international links, levelling up regional economies, deliver net zero commitments and helping firms hire the people and skills they need.

“Awarding freeport status to eight sites across the country, as well as a new Treasury hub in Darlington and infrastructure bank in Leeds, should bring benefits to local businesses and help boost wider regional economies – in addition to bolstering the UK’s global trading position. Firms look forward to working with local stakeholders to make a success of these initiatives and ensure they deliver economic gains for communities across the UK.

“Hydrogen investment in Holyhead and the announcement of a new green bond, alongside additional support for floating wind, energy storage and biomass schemes, reaffirm the UK’s commitment to net zero ahead of the COP26 summit. Further action on transport and building decarbonisation is now needed to make this a truly green recovery.

“Reform of the sponsored visa scheme is a further sensible move that will help firms of all sizes to hire and grow as they look to bounce back from the pandemic.”

 

Original article link: https://www.cbi.org.uk/media-centre/articles/cbi-response-to-budget/

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