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Big decisions needed on green growth as UK lags behind rivals – CBI chief

The UK is lagging behind international rivals on green growth, the chief of the Confederation of British Industry has warned, as he urged the Government to take “big decisions” to boost the economy.

Tony Danker called on Chancellor Jeremy Hunt not to “shy away from the hard decisions that can reverse the UK’s trajectory” of falling investment in his spring budget.

In a speech at University College London, the CBI director general said: “Growth still matters.

“The PM set out less than a year ago what is needed to transform our economy. The ideas are there.

“Let’s stop second guessing ourselves and get on because there is money on the table to capture right now.”

He argued that “our international competitors in Europe, Asia and the US are going hell for leather on green growth and getting firms investing.

“We are behind them now and seem to be hoping for the best.

“It’s time for us to take those hard decisions, generating the forward momentum not only to limit recession this year but also get us really growing next.”

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He urged the Government to seize green growth opportunities by reforming the consent process for green infrastructure and using regulation to stimulate domestic demand for green technologies, as is being done for electric vehicles.

A permanent successor to the super deduction tax that ends in April is needed to prevent the UK from dropping from fifth to 30th place among the 38 Organisation for Economic Co-operation and Development (OECD) advanced economies for capital investment, Mr Danker said.

With the labour market hampered by chronic labour and skills shortages, the CBI wants to see reforms of the benefits system and childcare support that reduce disincentives for returning to work.

Mr Danker also warned that the Retained EU Law Bill, which says that at the end of this year all retained EU law in the UK expires, is “creating huge uncertainty for UK firms”.

Divergence should be done smartly, where appropriate and when Government and business are ready for bold and joint action, he said.

During the speech, the chief argued that the Government needs to take “courage” with migration policies in order to fix labour shortages, which he said is currently the number one issue for most of the CBI’s members.

He said: “This is a very, very straightforward system. We say, what skills does the country need? What skills do we have at home? For the skills we don’t have at home, let’s use migration.”

He argued that “fixed-term immigration”, or temporary visas for workers coming overseas, would be a solution to the immediate labour shortage problem, and one that the public would understand.

He added: “I do sometimes worry that we ask the home office to be in charge of immigration, which in turn almost makes a statement that it’s a security issue.

“Ideally, immigration would sit within the economic ministry because we see it as a growth issue, or the education department because we see it as a skills issue.

“So I don’t just blame the home office but sometimes I do find they don’t think enough about economic opportunity.

“I just think politicians today… don’t have the courage to confront people with this reality.”