CBI REACTION TO AUTUMN STATEMENT FROM CHANCELLOR
06 Dec 2012
The CBI yesterday gave its full reaction to the Autumn Statement.
John Cridland, CBI Director-General, said:
“The CBI has been crying out for real action on infrastructure, investment and exports.
“£5 billion on near-term infrastructure, like the tube to Battersea, half a billion a year tax relief for small firms, and £1.5 billion extra export support should boost investment and create jobs.
“The Government now has everything to prove by delivering. Businesses need to see the Chancellor’s words translated into building sites on the ground.
“It is no surprise that after a difficult year the economic realities dictate that austerity and debt reduction will take longer.
“The Chancellor has stuck to his guns on deficit reduction - avoiding deeper cuts or more borrowing in order to retain international credibility.”
“It’s absolutely right to shift the focus from current to capital spending to boost jobs today and the UK’s competitiveness tomorrow.
“This package of £5bn infrastructure investment targets some key projects – such as the tube to Battersea, the A1 upgrade and 100 new schools – that should help strengthen our infrastructure. The Government has also identified some quick wins by focusing money on repair and renewal of our congested local roads.
“We back speeding up the release of public sector land and throwing efforts behind kick-starting large, stalled sites to get the housing market moving.
“What matters now is how quickly we can get shovels in the ground. Investors will be buoyed by the new model to channel private finance into UK infrastructure ending months of uncertainty. Now we must use this momentum to get Britain building.”
“The Chancellor has gone further than expected by cutting the headline corporation tax rate by an extra 1%, which sends a clear signal that the UK is a leading place to invest.
“Increasing the Annual Investment Allowance from £25,000 to £250,000 for two years will stimulate business investment in buildings and machinery, particularly by SMEs. The time limit on this measure should help to bring forward much-needed investment into the next two years.
“Extending the enhanced small business rate relief for another year will be good news for firms facing significant cost pressures.
“We support the introduction of an ‘above the line’ credit for R&D, but this must be optional not mandatory to avoid unintended consequences for some companies.”
“The £1.5 billion direct lending to boost exports will support Britain’s high-growth firms break into new markets. This levels the playing-field with other countries, like the US, who already back their businesses to boost trade.
“A commitment to ensuring the UK visa system is open to the best and brightest will reassure businesses, but only a full re-assessment of the migration target will put the issue to rest.”
“Entering new markets and growing in existing ones depends on companies having access to useful business advice, helpful contacts and good commercial engagement. Additional funds for UKTI, if spent well, will help to drive up the UK’s export performance.”
“Disappointing growth makes deficit reduction more difficult, but extending spending restraint for a further year to meet the Government’s primary fiscal mandate is an appropriate response to the OBR’s growth downgrade. A sound fiscal policy including balanced budgets over the medium-term contributes to economic stability reducing risks for business.”
“The Chancellor has avoided some of the more sweeping effects that would have been caused by cutting the annual tax relief limit to £30,000, but the cut to £40,000 still undermines the Government’s efforts to encourage saving and investment in our economy.
“We are pleased that the Chancellor recognises the economic case the CBI made for addressing pension fund deficits. Giving the Pensions Regulator a focus on growth and allowing scheme deficit calculations to reflect the long-term nature of pensions will ensure that funds are not diverted away from investment.”
Heseltine Review and industrial policy
“To date the Government’s localism initiatives have lacked teeth. We have been calling for measures to rebalance our economy by playing to our industrial strengths and maximising growth across the UK. New funding for Local Enterprise Partnerships and the expansion of the Regional Growth Fund will give local businesses more control to create growth in their area.
“It’s essential the UK retains its competitive advantage in sectors where we are world class. Increased funding for scientific infrastructure will help to maintain the UK’s attractiveness as a place for business to invest in R&D, while the additional funding for advanced manufacturing supply chains will provide certainty and consistency.”
Energy and climate change
“The Government’s gas strategy will improve confidence for investors in the UK’s energy sector. It makes sense to consult on the tax regime for shale gas so we maximise the amount of energy we can produce at home at reasonable cost.
“But we cannot become dependent on any one source of energy - gas will have an important role to play as part of a secure, low-carbon power mix alongside renewables, nuclear and carbon capture and storage.
“Today’s announcement on simplifying and reviewing the Carbon Reduction Commitment does not go far enough. We need a firm commitment now to scrap the scheme when public finances allow, and to replace it with a more coherent approach to business energy efficiency.”
Tax avoidance and evasion
“We welcome the extra £77m funding for HM Revenue & Customs to expand their programme to tackle abusive avoidance and evasion, which the CBI has consistently said that is does not condone.
“The vast majority of businesses pay the right amount of tax. Taxation of multinationals is complex and has to be tackled internationally at the OECD, EU and G20 levels, not unilaterally, which would risk damaging the UK’s attractiveness as a place to invest.”
“This decision will help hard-pressed businesses and motorists at a time when fuel costs are hitting people’s pockets.”
Empty property rates
“Extending the exemption period for empty property rates on new commercial projects will boost confidence in the property market and encourage more construction activity.”