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Higher business taxes and lower investment ‘not a plan for growth’ – CBI chief

The Director-General of the CBI is to call on the Government to make ‘big choices’ this autumn if the UK is to unleash business investment and ‘forge a new growth story to compete in the world’.

Tony Danker, in a speech at Alliance Manchester Business School this afternoon, will also warn the Government that a ‘return to business as usual in our economic policy, at this unique moment in British economic history, would be a mistake’.

He will also say that after the announcement on plans to increase National Insurance Contributions to support social care, the Government must use the autumn to ‘flip business taxation on its head’ and reward those firms who invest.

READ MORE: 18 firms including Amazon, Boohoo and BGEN creating thousands of jobs across the North West

Mr Danker will say: “The lack of detail and pace from the Government on some of the big economic choices we must make as a country, are the biggest concerns for business.”

He will also identify four key levers the Government can use to get businesses investing more:

  1. Smarter taxation – reward those firms who invest; for example, stop punishing greening UK building stock through business rate increases;
  2. New skills for new markets – creating individual training accounts to more easily access support, for those most in need and/or out of work;
  3. Catalytic public investment – to speed up the development of major infrastructure projects, new industries, and cutting-edge tech;
  4. Market making – replicate the successes of offshore wind in hydrogen and other emerging industries and fundamentally rebalance UK economic regulation.

On the important the economic choices the country faces this autumn, Mr Danker will say: “This autumn requires big choices. Choices that will define a decade. We’re at an inflexion point. Brexit, Covid, Climate Change – all demand that the UK forges a new growth story to compete in the world. And believe me this will be a competition – for new markets, new skills, and technological advantage.

“In recent months I have talked to hundreds of UK businesses. Many of whom are global firms or have global customers. They tell me what other countries are doing – the strategies they have, the investments governments are making, and how the UK compares.

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“One of the great risks of the Budget, the Spending Review, and the Global Investment Summit – all set for this autumn; as well as our net-zero strategy, infrastructure strategy, and skills policy – is that we are too complacent, too proud about what we’ve done so far. That we regard the benchmark as beating the policies of UK governments past, rather than global competitors present.

“But the 2021 reality is quite different. Over the last two years, every country’s strategy to win the future has shifted dramatically. Every country is choosing to invest in the future – the future engines of economic growth.”

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He is also expected to say: “Taken together these will achieve the seismic shift in the UK’s investment mindset we need, and also show international investors that the UK is more than a castle on a hill.

“Because let’s be clear, these four choices – that drive domestic investment – are the preconditions to attracting foreign investment to our shores. We know that because global investors have told us.

“They, more it seems than British policymakers, view our country’s offer against our competitors. And they have told us these things are where the UK must do more. Because they are ready to go, the real question is where?

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“These decisions need to come now. The UK has a packed autumn ahead – with the Global Investment Summit, Budget, Comprehensive Spending Review and COP26.

“The best possible time to make choices. To invest in the UK and to show the world we mean business. The CBI has a mantra – seize the moment. It’s our imperative to government but also to business.

“Together we can choose investing in the UK. Investing by the UK. Let that be the legacy of Brexit; let that be the legacy of Covid; and let that be the path to a net zero-world.”

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