Finance / CBI warns of £9 billion yearly burdens on firms ‘from policies like new living wage’
CBI warns of £9 billion yearly burdens on firms ‘from policies like new living wage’
15 February 2016
Businesses face annual burdens of £9 billion because of a "spate" of Government policies on issues including pay, a leading employers group has warned.
The CBI highlighted the new national living wage, apprenticeship levy and “inaction” on business rates as hitting firms’ ability to invest and create jobs.
In its Budget submission, the CBI said the rising burden of policy costs on businesses has “crept up far enough.”
Chancellor George Osborne was urged not to increase the “cumulative burden” when he delivers his Budget on March 16.
Carolyn Fairbairn, CBI director general, said: “A spate of recent Government policies, including the national living wage and the apprenticeship levy, will cost the economy around £9 billion a year by 2020.
“The UK needs to be able to grow its way out of the deficit, but the danger of this rising policy burden is that it holds back businesses, particularly smaller firms.
“This cost burden has now crept up far enough, if the Government is serious about supporting the UK’s companies to drive growth in the economy.
“In this Budget, businesses will want to see the Government updating the UK’s business rates system, supporting investment through the capital allowance system and equipping our world-class innovators with the tools they need to compete globally.”
The CBI made a series of recommendations, including tackling the country’s “outdated” business rates system, simplifying energy efficiency taxes and supporting investment.
A Treasury spokesman said: “This government has backed business every step of the way, reducing national insurance contributions for small firms and is cutting corporation tax to 18% for all companies.”
“Though we have the highest employment rate in our history and wages are growing in real terms, the risks we see elsewhere in the world mean we must stick to the plan that’s cutting the deficit, attracting business investment and creating jobs.”