CBI: Ministers must show they are serious about backing business

The UK government has been told by the country's largest business group that it must prioritise backing for businesses’ growth ambitions if it wants to build prosperity across the country.

Relocate Editorial

6 February 2017

The Confederation of British Industry (CBI) said in its Budget submission on Monday to Chancellor of the Exchequer Philip Hammond that, with firms facing heightened economic uncertainty in 2017, the government must work in partnership with businesses to ensure stability.It said that, in order to boost modern UK productivity over the long term, a focus on education and skills was key to improving people’s life chances across the whole country.

Building a 'long-term modern economy'

Rain Newton-Smith, CBI chief economist, said, “Prioritising stability will inject further confidence in the economy now, and help boost the country’s productivity and prosperity for the future. “While the economy has proved resilient, inflation is rising and growth is set to slow. As uncertainty around the manner of our EU exit dampens investment and higher inflation erodes consumer-spending growth, the government must show that it is serious about supporting companies to invest, to help our regions and nations prosper.“The government’s Industrial Strategy provides a significant opportunity to build a long-term modern economy as the foundation for a prosperous, fairer and more inclusive society. “At this Budget, businesses will be interested to see how the National Productivity Investment Fund, announced last year, will be spent and by when. Alongside this, they will be listening for more information on business rates reform and the government’s plans to increase educational attainment.”

UK job market 'remains buoyant'

The CBI submission came as a study by Reed, a major UK recruiter, showed that vacancies in manufacturing had increased by almost a quarter over the past year, with strong employment growth also recorded in construction and engineering.Reed said job vacancies had increased in all regions of the UK over 2016 and had been particularly strong in Northern Ireland and Wales.James Reed, chairman of reed.co.uk, said, "There's a lot of uncertainty in world politics at the moment, but our data shows that in spite of everything, the UK jobs market remains buoyant."Manufacturing is key to prosperity and as such is a vital part of any economy and that is why these figures are so encouraging. This is not a one-off, either. The sector has been going in the right direction for some months now, which is reassuring news."

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Coinciding with the study was a report from the Society of Motor Manufacturers and Traders (SMMT) showing that new car sales in the UK reached a 12-year high in January. Almost 175,000 cars were registered last month, 2.9 per cent up on a year ago and the highest January figure since 2005.Mike Hawes, SMMT chief executive, said, "2017 got off to a good start in the new car market, buoyed by a great range of new models which are safer and cleaner than ever before."It's encouraging to see alternatively fuelled vehicles benefiting from this positive growth, reaching a record market share."After record growth in 2016, some cooling is anticipated over the coming months, but provided interest rates remain low and the economy stable, the market is in a good position to withstand its short-term challenges."

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