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CBI calls for 'lasting budget boost' to protect UK economy

Suban Abdulla
·4-min read
A street poster 'Stay Safe - Make Space' seen in Dublin during Level 5 Covid-19 lockdown. 
On Saturday, 30 January, 2021, in Dublin, Ireland. (Photo by Artur Widak/NurPhoto via Getty Images)
The CBI outlined three key areas for the chancellor to focus on to give businesses the boost they need to exit the lockdown. Photo: Artur Widak/NurPhoto via Getty Images

The Confederation of British Industry (CBI) has outlined three areas for chancellor Rishi Sunak to focus on in next week's Budget to help businesses out of lockdown.

It comes after prime minister Boris Johnson announced a step-by-step roadmap out of lockdown, which could see England return to "normal" by 21 June.

The CBI has called on Sunak to focus on jobs, confidence and investment to give firms the "boost they need to bring the UK back to growth."

CBI, which represents 190,000 businesses of all sizes and sectors across the UK, is urging the chancellor to hone in on "policies that will catalyse business investment" in key areas like jobs, skills and innovation.

It said that business is also looking to Sunak to incentivise green investment to set them on track to net zero.

The group warned that firms that are still in "emergency mode" are "sounding alarm bells" that any significant tax rises in the short-term will "stifle their ability to invest, hamper UK competitiveness and hold back our recovery."

Rain Newton-Smith, CBI Chief Economist, said that "this Budget is like no other, with many businesses still on their knees" after the impact of the coronavirus pandemic.

"The prime minister’s roadmap for easing restrictions and the chancellor’s forthcoming Budget represents two parts of the same story — bookending the immediate COVID-19 crisis by relieving firms under pressure and setting the economy on a path to recovery," he added.

The three key areas that the CBI has identified are:

  1. Protecting jobs, firms and livelihoods in the immediate term by extending furlough, providing further VAT deferrals and giving firms (including in vital supply chains) a further business rates holiday.

  2. Get businesses investing, by using incentives to spur investment in skills, jobs and innovation. This includes vouchers to get SMEs investing in digital technologies; unlocking investment in training by reforming the Apprenticeship Levy; and setting up the new National Infrastructure Bank to crowd-in investment.

  3. Provide the vision for a long-term plan for economic growth. From green investment incentives to laying the groundwork for a fundamental reform of the unfair and uncompetitive business rates system, businesses want a signal of intent about the future of the economy.

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Newton-Smith continued: "But this can’t just be about the here and now. We need to match the urgent need to protect jobs and firms with giving everyone a glimpse of an ambitious vision for the future of the economy. That means giving firms the confidence they need to invest by committing to the kind of pro-business environment that would help them to compete with the world’s best.

"Consumption and government spending alone can’t set us on the path to recovery. We need a dynamic and competitive business community powering us forward. That means avoiding any moves in the short-term that would hold business back from doing what it does best: innovating, creating jobs and delivering greater prosperity for all."

CBI's calls follow a slew of plans the Treasury announced ahead of the chancellor's second Budget on 3 March to help get the country back on track post-Brexit and the coronavirus pandemic.

"Now we’ve left the EU and taken back control of our borders, we want to make sure our immigration system helps businesses attract the best talent from around the world," Sunak said.

On Friday evening, it announced a £126m investment to bolster traineeships and create 40,000 new posts to help people back into the jobs market.

The Treasury also unveiled a mortgage scheme to help first-time buyers with low deposits buy a home. Under the plans, buyers will pay just 5% deposits to buy homes worth up to £600,000 and will offer lenders the guarantee to provide mortgages covering the remaining 95%.

Additionally, it has also revealed plans to create a task force to crack down on fraudsters exploiting the UK government COVID-19 support schemes. Sunak will unveil at the Budget on Wednesday a £100m investment to launch the task force.

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