The CBI has put construction at the top of its Budget priorities, calling on the chancellor to boost housing and infrastructure as part of a £1.25 billion shift to capital spending.
The CBI has proposed shifting £2.2 billion from current spending to £1.25 billion on capital investment - including housing - and £950 million on ‘high-growth’ business tax measures, such as a 2 per cent cap on the planned increase in business rates and the removal of stamp duty on equity finance for mid-sized companies.
It also calls for a capital allowance for new infrastructure spending to “incentivise businesses to upgrade the quality of privately-owned infrastructure”.
The CBI has also joined the call for tax cuts or subsidies on housing repair and maintenance work to help create up to 80,000 jobs in the construction sector.
CBI director-general John Cridland, said: “To boost the construction sector, we are calling for 50,000 new affordable homes to be built, incentives for refurbishing empty homes and the housing guarantee scheme to be extended to all types of housing. We must supercharge the NewBuy scheme to allow second-time buyers struggling to get on the next rung of the property ladder.
“With its relatively short lead-in times, house building offers the most bang-for-buck in growth terms - unleashing pent-up demand, while creating jobs and growth.”
The CBI is also calling on the government to bring forward its road spending and repair programme, as well as strengthening support for business exporters and smaller firms struggling to access finance.
See a list of the Budget prioritiess compiled by the CBI:
- Fund a further 50,000 affordable homes by injecting £1.25 billion of capital investment through the Affordable Homes Programme
- Accelerate public sector land release for new housing on “build now, pay later” terms by moving all responsibility to the Homes and Communities Agency
- Review measures to increase institutional investment to encourage pension funds to invest in housing
- Explore expanding the NewBuy mortgage guarantee scheme to those with limited or negative equity looking to step-up to their second home, making more properties available for first-time buyers
- Introduce a housing deposit ISA to encourage saving. Combined with proactive marketing of the FirstBuy and NewBuy Government schemes, this would help overcome the perception among first-time buyers that they are unable to get a foot on the housing ladder
- Extend the housing guarantee scheme to cover all housing tenures to support smaller house builders access finance.
High-growth business tax measures
- Cap business rates at 2 per cent instead of pressing ahead with the planned rise to 2.6 per cent in 2013 at a cost of £140m. This would help safeguard jobs on the high street
- Take further action to ensure that equity finance is attractive to high-growth firms by removing Stamp Duty on shares listed on the Alternative Investment Market - a key source of non-bank equity finance for mid-sized businesses
- Freeze Air Passenger Duty in nominal terms at a cost of £50m.
Deliver on wider infrastructure promises
- Press ahead with roads repair, maintenance and improvement programme
- Fast-track spending on crucial roads, such as the A63 in Yorkshire and Humber, and the A38 junction in Derby
- Ensure the major infrastructure planning system delivers on time.
Measures to help high-growth firms access finance
- The Government should also take steps to ensure that those firms with the capacity to invest and export can do so. There also needs to be a greater commitment to delivering an industrial strategy that champions key sectors, while protecting investment in research and development. The Government must:
- Deliver the Business Bank to act as a one-stop shop for exporters and a source of patient capital for growing firms, while supporting the development of alternative sources of finance
- Get direct lending to exporters up and running
- Address the effect of mispriced pension deficits on finance.