FILE PHOTO: New Chancellor of the Exchequer Jeremy Hunt leaves 10 Downing Street in London, Britain, October 14, 2022. REUTERS/Henry Nicholls
LONDON: The United Kingdom government must loosen migration rules, reform the planning system, and extend tax relief for urban businesses in this week’s Autumn Statement or risk condemning the country to a decade of no growth, Britain’s biggest business group says.
The Confederation of British Industry (CBI), which represents the country’s largest employer, has urged Chancellor Jeremy Hunt not to ignore growth in his Autumn Statement, when he reveals how the government will fill an estimated £55bil (US$65bil or RM299.7bil) hole in the public finances.
Hunt has warned he will have to make “difficult decisions on public spending and taxes” to get debt falling as a share of gross domestic product and restore the nation’s credibility after his predecessor spooked international investors with a series of unfunded giveaways in September.
He has pledged to sketch out a growth plan but is not expected to pledge any funds for the effort.
Tony Danker, the director general of the CBI, said he recognised that stability was the government’s priority.
However, he warned Hunt that businesses would scrap investment plans for next year if there was only talk of growth in the autumn statement.
“The chancellor has said he will set out a plan for growth. But if these are only warm words, it won’t stop businesses from pulling back on investment. It must tackle the real barriers we face right now,” Danker said.
“In the past three weeks, I have talked to hundreds of firms that need to decide this month whether to invest for next year or whether to go into hibernation, in fear of a predicted recession and no action from policymakers.
“With fiscal and monetary policy tightening, we need many more pro-growth policies for our economy. That is, if we’re to avoid a decade of no growth,” he said.
The government does not need to spend much money to reassure business, he said.
Loosening migration rules to help firms fill job shortages, streamlining the planning system to speed up decision making and bring forward private investment, and tailoring financial reforms to make it easier for asset managers to invest in “pro-growth projects” would signal the UK was open for business.
The CBI said it had one “modest fiscal ask” to smooth the upcoming cliff edge in business rates in April 2023 for high street businesses like retail, leisure and hospitality companies.
The £1.7bil (RM9.2bil) tax break gives each firm up to 50% off their business rates, up to a maximum of £110,000 (RM597,922). — Bloomberg
