This year, the CBI continued to represent UK business on the issues that matter most to our members. We listened to you, and took your asks to government, providing detailed, costed proposals where appropriate and suggesting practical alternatives and solutions to the challenges that affect UK business.
The Spring Budget saw delivery against one ask to help tackle the problem of productivity by removing blockers to parents re-entering the workforce. The CBI made childcare reform – and reducing the spiralling costs – the number one priority for the Spring Budget, and in March, the government confirmed that it would increase funding for existing childcare provision and announced that working parents in England would be able to access 30 hours of free childcare per week.
Likewise, in November’s Autumn Statement the government met one of our core asks on behalf of our members when it made the temporary measure, full expensing, permanent with the Chancellor thanking the CBI when announcing the measure in the House of Commons. The measure allows companies to deduct 100% of qualifying plant and machinery costs from taxable profits.
Read on for information on these wins, as well as the many other ways in which we delivered for our members this year.
Securing permanent full expensing
Since 2021, we’ve campaigned for full expensing – which allows companies to deduct 100% of qualifying plant and machinery costs from taxable profits – to be made permanent. And in early November, we reiterated our commitment in a joint open letter supported by more than 200 companies and trade associations.
Businesses told us this would help them to make the big changes the country needs: electrifying delivery fleets, updating manufacturing production lines for everything from food to cars, and bringing faster broadband to remote and rural areas.
And in his Autumn Statement on 22 November, the Chancellor delivered on this campaign, highlighting the success of temporary full expensing measures following the pandemic. The Office for Budget Responsibility (OBR) expects the move to lead to a cumulative boost to UK investment of £13.9bn in real terms by 2028/29.
Increasing funding for existing childcare provision
For much of 2022 and early 2023, the CBI lobbied government to reduce spiralling childcare costs which prevent parents from accessing employment and stop working parents – who want to work more – from increasing their hours.
The CBI called on government to create a system of provision that is affordable, accessible and high-quality, by:
- increasing funding into the existing system
- extending existing provision to 1- and 2-year-olds
- and changing the Universal Credit System so that childcare support is paid up front, rather than in arrears.
In the Spring Budget in March, the government confirmed that it would increase funding for existing childcare provision – announcing that working parents in England would be able to access 30 hours of free childcare per week for 38 weeks of the year. The provision starts when their child is 9 months old and ends when they start school. The new offer will be rolled out in stages from April 2024 to September 2025.
Supporting grid connectivity
In our September submission to HM Treasury, we asked the Chancellor to cut the time it takes to build electricity transmission infrastructure and obtain connections to the grid. The more-than-a-decade connection time that energy and renewable projects often face in the UK significantly deters investors, especially given far shorter wait times in competitor markets.
In the Autumn Statement, the Chancellor announced a reform of the grid connection process to cut waiting times – including freeing up over 100GW of capacity so that projects can connect sooner.
Creating a new, simplified R&D tax credit scheme
Throughout the Treasury’s review of R&D tax reliefs, the CBI pushed the Chancellor to introduce a new R&D tax credit scheme that would be simple, certain and would drive investment from innovative businesses of all sizes.
The UK has thriving life sciences and tech sectors, producing everything from the COVID vaccines to the latest developments in web search AI. R&D tax credits have been instrumental in funding many of these ideas in their early stages, but the UK system has fallen behind in two ways: cover for capital expenditure and social sciences (both vital for anchoring investment in the UK and competing with other jurisdictions, like France and Ireland) and in the complexity of the system, driving uncertainty for business.
The Autumn Statement in November laid out a new, simplified R&D scheme, reducing the number of schemes from three to two and providing support for R&D intensive and loss-making companies to meet those aims.
Pushing the government to join Horizon Europe
In March, the CBI, along with representatives of the UK and wider European research, innovation and business communities, signed a joint statement pushing for finalisation of the UK’s association to Horizon Europe.
The business community saw participation in Horizon Europe as a key priority. The networks, international partnerships and opportunities to shape direction of research all offered by Horizon Europe association are unique and would be extremely difficult to replicate within the UK.
The joint statement urged the government to associate the UK with Horizon Europe as soon as possible, and gave clear evidence of business’s, as well as the broader UK innovation sector’s, position on the value of Horizon Europe to the UK.
On 7 September, the UK joined Horizon Europe under a new bespoke deal.