Britain’s biggest employers’ group has renewed its calls on the Chancellor to stimulate economic growth by channelling new investment into infrastructure.
The CBI wants George Osborne to “score the growth and investment policy goals” outlined in his autumn statement when construction and infrastructure were at the heart of the announcement.
It is also calling for changes to the UK tax system to introduce a new capital allowance to attract investment into types of infrastructure which do not currently qualify.
CBI director general John Cridland said: ““The Chancellor must use this budget to score the growth and investment policygoals he put forward in his autumn statement.
“Delivering private sector investment in infrastructure, supporting mid-sized businesses, hammering out the details on credit easing, extending the Youth Contract to 16 and 17-year-olds, and introducing the New Build Indemnity Scheme for mortgages at the earliest opportunity will all provide a real boost for UK growth and jobs.
“With our economy firmly under the international spotlight, there is no time to lose: Plan A plus must become a reality.
“We also want to maximise the incentive for businesses to invest in Britain. So we’re calling on the Government to make some targeted changes to the UK tax system, which could make an impact on business decisions and create new opportunities for growth.
“While the state of the public finances is tight, the Chancellor still has an opportunity in this Budget to make sure the UK tax system is as internationally competitive as it can be.”
The CBI is calling on the Chancellor to –
Implement policies proposed in the Autumn Statement to support growth, including:
- Stimulating infrastructure investment, through new models of private finance, including investment by pension funds. This will require pooled investment platforms, infrastructure being a mainstream asset class, and effective baton passing between the construction phase and long-term financing
- Providing non-bank finance to mid-sized businesses through a corporate bond market, incentivising corporate venturing, and through the Business Finance Partnership
- Delivering on its proposals for credit easing, which means getting the details right on a bank guarantee scheme
- The Youth Contract, which needs to be extended to 16 and 17-year-olds
- The New-Build Indemnity Scheme, which will help make mortgages more affordable, and unfreeze the Housing market.
Boost growth through reforms of the UK’s tax system:
- Ensuring changes to the UK’s Controlled Foreign Companies regime result in a simpler way of taxing foreign profits, and a less complicated “Gateway” than is currently in the Government’s draft legislation
- Introducing a new capital allowance to attract investment into types of infrastructure which do not currently qualify, this would apply only to future spending to minimise cost to the Exchequer and ensure the proposal incentivises new private investment in infrastructure
- Improving the flow of credit to companies, especially those with high growth potential, by expanding the Enterprise Investment Scheme; reducing the cost of raising equity for small and medium-sized businesses; and improving incentives for entrepreneurs’ relief, as soon as the public finances allow.
Ensure environmentally-related taxes do not undermine growth and investment, by:
- Replacing the Carbon Reduction Commitment (CRC) with a new Climate Change Levy (CCL), cutting confusion and complexity for businesses while protecting the Treasury’s revenue stream, by expanding the CCL, introducing Mandatory Carbon Reporting (MCR), and abolishing the discredited CRC
- Getting the increase in Air Passenger Duty right, to balance the amount of tax raised by the Treasury with the value of aviation to the economy, and pegging this year’s rise to inflation at 5%, rather than the full 8% as planned.