The CBI has set out a range of sustainable pro-growth policies aimed at sparking underperforming productivity growth via business investment. The suite of measures includes policies primed to power productivity, spur innovation, investment, and energy efficiency, as well as access to critically in-demand skills.

Speaking ahead of the Spring Statement, CBI Director General Tony Danker said: "Business backs the Chancellor's desire to foster a renewed culture of enterprise and deliver a more ambitious growth rate. His vision set out only last week to leverage the tax and regulatory system to promote business investment, upskill Britain's workforce and stimulate innovation is the right recipe for future success.

"Faced with a record tax burden, a cost-of-living crisis, wage pressures and the end of the super-deduction, firms will be looking to the Spring Statement for a clear signal that the government's ambition will be matched by action."

On 'going for green growth', CBI Chief Economist Rain Newton-Smith said: "With COP26 fresh in our minds, investing in green growth isn't just the right thing to do, it's the smart thing too. From decarbonising homes and buildings to building a first-class infrastructure for electric vehicles, the UK has an opportunity to be a world leader in net zero technology and delivery.

"Businesses are already aware of the size of the prize, but lack of clear direction from government is holding them back. By getting strategies and incentives in place now, we can unleash the wave of private investment needed to turn ambition into action."

On greening the tax system, Rain Newton-Smith, said: "Reforming the tax system to incentivise 'green' capital investments is vital for both achieving our 2050 net zero target and capitalising on the economic opportunities provided by decarbonisation. That's why firms are looking to government for a clear strategy on the way ahead.

"By increasing capital allowances to 120% of an investment's value, we can give firms the confidence to invest early, and reap the rewards of green technologies, without being put off by high upfront costs. Extending allowances to electric vehicle purchases – and rentals – could provide the certainty needed to spur greater investment in sustainable transport.

"For SME's we should look at establishing a tax credit 'green' uplift to help unlock green investments and prevent them from missing out on the opportunities provided by net zero."

Extracts fron CBI Submission to the Spring 2022 Fiscal Event - Go For Growth

Lead the global path to a decarbonised economy

While the Net Zero Strategy brought much needed sectoral strategies to align to the UK's 2050 net zero target, strong consumer incentives and detailed business models were crucially missing.

The opportunities from decarbonising the UK economy are high. But so too are the health, social and economic costs of inaction.

Despite welcome funding at the Autumn Budget/CSR, the current level of announced public investment to support decarbonisation remains behind international counterparts and could see the UK fall behind in delivery of decarbonisation and winning the global race in new green markets. The £25.5bn of emissions- reducing spending announced since the Ten Point Plan74, falls short of the US and EU flagship climate investments, worth 2.9% and 1.6% of 2019 GDP respectively75, compared to just 1.1% for the UK.

But rather than creating insurmountable costs and debt, the OBR highlights that the transition to a low- carbon economy 'could even improve the public finances over the next thirty years were the Government to accommodate net zero investment within its existing spending plans and find a replacement for declining fuel and other hydrocarbon related revenues'.76 While 'unmitigated climate change would ultimately have catastrophic economic and fiscal consequences for the UK'.77

Failing to act now – with detail and public investment – could result in the UK missing the opportunity to capitalise on new markets – being overtaken by international competition. But this Spring, we can put momentum behind these ambitions, developing progressive market mechanisms and plugging the funding gaps for critical low carbon technologies.

But the job doesn't finish here...

Over the next year, the CBI will be looking to engage with the Government to strengthen and deliver our emissions targets and develop new environmental and nature resilience objectives, including:

Net Zero Test and ETS: establish a new overarching Net Zero Test for Government policy and continuing development of the UK Emissions Trading Scheme (ETS) including linking it with the EU ETS, as accounting for carbon becomes embedded in decision making.

Green finance: implement the Greening Finance Roadmap and ensure Transition Plans and the Green Finance Strategy 2.0 provide long-term strategies and direction for investment and our aligned with our net zero strategy and reducing emissions across sectors.

IPA carbon calculator: Develop a standardised IPA carbon calculator across the Government Major Projects Portfolio (GMPP).

Net zero infrastructure finance: Ensure the UKIB prioritises early-stage investments and de- risking new technologies, particularly in the installation of rural EV charging infrastructure, development of CCUS, low-carbon hydrogen and sustainable aviation fuel production, and floating offshore wind. 

See more detail here: www.cbi.org.uk/articles/go-for-growth-a-challenge-to-the-government/