CBI warns against post-election ‘power vacuum’

Business body sets out plan for next parliament's first 100 days in paper Best Foot Forward.

Whoever is involved in forming a government must be aware that any delay in establishing policy will affect the economy and business community, according to a CBI report.

In the paper Best Foot Forward the organisation urges the new policy-makers to avoid a “power vacuum” by proactively putting in place measures to support investment and growth in the UK.

Suggestions for securing long-term success for UK business include:

  • Maintain an ambitious, long-term exports target to measure success across the parliament as part of a strategy targeting high-growth markets and unlocking the exporting potential of medium-sized firms
  • Outline a pragmatic and sustainable position on migration which includes scrapping the net migration target
  • Expand the scope of the R&D tax credit to encourage more product development in the UK
  • Establish an annual benchmarking review of the business environment to inform UK industrial strategy, alongside beginning work on an overarching ‘materials strategy’ to strengthen manufacturing supply chains

The CBI also reinforces its desire to see more support for growing businesses in the UK, creating a “UK Mittelstand” to compete with Germany’s historically robust mid-market.

The paper suggests ways to make this happen include making capital funding, such as private placements and uptake of equity funding, more readily available. It also urges the new government to make the wide range of available funding route more well-known.

>See also: Mixed reaction to Budget from small business groups

Ensuring the UK’s financial sector remains competitive is key for achieving these goals, according to the paper. It therefore suggests spending the first 100 days of parliament giving the sector the tools it needs to achieve long-term excellence.

All of this should be underpinned by a Comprehensive Spending Review (CSR) within the first 100 days of the next government, according to the report.

CBI director-general John Cridland called on whoever forms the new government to ensure “the period of post-election uncertainty is kept to a minimum”.

“We cannot afford a power vacuum that delays urgent policy decisions and unsettles potential investors, so any new Cabinet must get down to business as soon as possible,” he said.

“Much remains to be done to secure the UK’s economic future and business wants to see a confident, new administration getting into its stride by taking action on the key priorities, including staying on top of the public finances, meeting the urgent demand for new homes and making progress on EU reform.”

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Praseeda Nair

Praseeda Nair

Praseeda was Editor for GrowthBusiness.co.uk from 2016 to 2018.

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