CBI Urges Next Government to Prioritize Economic Growth in First 100 Days
Businesses are eager to see ‘Brand Britain’ revitalized and the UK’s investment appeal strengthened globally.
UK business leaders have issued a challenge to the next government to achieve economic growth and business investments within the first 100 days of Parliament.
The Confederation of British Industry (CBI) has outlined immediate priorities for the incoming government following the July 4 general election.
In its Business Manifesto, the CBI has urged ministers to “refresh brand Britain” and implement an innovative trade and investment strategy. This vision was crafted based on consultations with over 400 business leaders and 70 trade associations.
“A key focus should be on enhancing the appeal for investors in ‘Brand Britain,’ ensuring that we remain at the forefront when it comes to investment. Additionally, a concerted effort in the first 100 days on tax, planning, and labor market enhancements can provide businesses with a clear path for growth,” stated CBI Chief Executive Rain Newton-Smith.
Over the past five years, the economy has concentrated more on “shock absorption” rather than boosting growth, as per the CBI.
The top three priorities listed by the Conservatives ahead of the July election are economic growth, inflation reduction, and national debt decrease. Similarly, economic stability is a key pledge from the opposition.
A new government, regardless of its political affiliation, has the potential to provide the necessary boost by prioritizing business investment and addressing ongoing labor and skills shortages, according to Ms. Newton-Smith.
Turbulent Economy
The CBI Business Manifesto, released on Monday, underscored the turbulent economic environment for UK businesses due to historically high levels of inflation and interest rates.
Following a slow recovery from the technical recession at the end of last year, UK’s inflation rate dropped to 2.3 percent in April from a peak of 11.1 percent in October 2022.
Economists predict sustained high inflation in the latter part of the year, while the Bank of England (BoE) remains cautious about reducing the current 5.25 percent interest rate.
With monetary policy expected to remain stringent, the CBI proposed that growth will primarily stem from the private sector.
“The imperative challenge for the new government’s initial 100 days will be to formulate a credible plan to attract private sector investment and achieve sustainable growth,” added the group.
Irrespective of the party in power, business leaders are eager to see the new government actively engage with global investors, restore UK’s competitiveness, and strengthen climate commitments.
Building Momentum
During the first 100 days of the new Parliament, lawmakers should focus on “building momentum” and establishing a comprehensive UK business tax roadmap, centered on a streamlined and digitalized tax system, as per the CBI.
Furthermore, the government should streamline planning processes, enhance the labor market, and boost productivity, according to the business manifesto.
The CBI also proposed that the government develop an extensive UK trade and investment strategy spanning at least five years, covering exports, imports, and inward and outward investments for global competitiveness.
The government should commit to refraining from introducing additional sector-specific taxes and release a new net zero investment plan in the initial post-election fiscal event, recommended the CBI. This move would create more jobs in energy security and efficiency, noted the business group.
The importance of unlocking the potential of UK regions and aligning industrial and trade strategies with regional mayors was highlighted by the CBI. This alignment can be realized through a new industry-supported Mayoral Economic Compact launching on July 17.
For instance, the southwest region could benefit from investment in net zero technologies like offshore wind, hydrogen, and sustainable aviation fuels. The Midlands should focus on upskilling the workforce, while Wales needs solutions to mitigate labor shortages. The northwest should receive support for high-growth tech and innovation firms, as per the CBI.
