CBI welcomes budget boost for housing
John Cridland, the CBI Director-General, said:
“The CBI was clear this Budget needed to deliver a good dose of business and consumer confidence, while being necessarily fiscally neutral.
“We’re particularly pleased our call for a focus on the short-term boost of housing has been heeded, alongside an increase in longer-term big ticket infrastructure spending.
“This was recognition it was a mistake to cut capital spending so sharply and that other growth-boosting measures were taking too long. But by shifting £6bn to housing and infrastructure, the Government has sowed the seeds for growth and jobs.
“An extra one penny cut in corporation tax will also make the UK one of the most internationally competitive locations in which to do business.
“The new obligation on the Pensions Regulator acknowledged that the huge commitment employers are making to sustain pensions for employees cannot be separated from the drive for growth.
“Small and medium-sized businesses will be particularly encouraged that there was money available for the Chancellor to cut the jobs tax through a new employment allowance. We also need to remember the impact of business rates on the hard-pressed high street.”
On fiscal strategy “The economic backdrop has deteriorated and although the OBR expects the economy to gather pace over the year, higher inflation and continuing uncertainty in Europe has weakened prospects.
“As things stand today, the Government must stick to its guns on its fiscal strategy. Changing course would risk damaging market credibility and could lead to higher public borrowing and interest rates.”
On housing “The Chancellor has heeded our call to stimulate the housing market, by providing support to trapped ‘second steppers’, through an extension of the Mortgage Guarantee Scheme.
“The Help to Buy Mortgage Guarantee Scheme is a bold step, which will increase momentum in the housing market and support new high loan-to-value mortgage lending.
“The new £3.5bn equity loan scheme and the additional investment in affordable housing will increase the supply of new homes.”
On infrastructure “While plans to boost capital spending on big ticket infrastructure projects from 2015 will be welcome, businesses will be impatient to see where this money will flow to in the Spending Review.
“The new guarantee to support the Drax power station is encouraging, but high expectations for further guarantees have fallen flat. The Government needs to do more to demonstrate to global investors that UK infrastructure is a prize worth pursuing.”
On Corporation Tax: “A further cut to the headline rate of corporation tax to 20% in 2015 will give the UK the lowest rate in the G20.”
On a growth objective for the Pensions Regulator: “Addressing the chilling effect of artificially-inflated pension scheme deficits on business investment is the right step.
“A new statutory growth objective will ensure the Pensions Regulator recognises the need to protect the financial strength of the sponsoring employer, who will then be able to stand behind their scheme more effectively.
“The best form of protection for employee’s benefits, and the economy as a whole, is a solvent and thriving employer.”
On the Monetary Policy Committee’s remit: “The impact of improving the transparency and communication of the Bank’s decisions should help amplify the effectiveness of monetary policy and support the recovery.
“More radical monetary policy options, such as forward guidance, could super-charge this further, although it seems that little is likely to change before Mark Carney takes the wheel.”
On support for smaller firms: “The new £2,000 National Insurance rebate will give smaller firms the confidence to take on extra staff.
“We have long called for the abolition of stamp duty on growth market shares to improve the attractiveness of medium-sized businesses to investors. Abolishing Stamp Duty will result in a more vibrant equity market for growing businesses.”
On business rates: “Conditions remain tough on the high street, so it is disappointing that the Government has not capped the increase in business rates. A 2% cap would have really helped hard-pressed retailers.”
On energy and climate change: “The commitment to take forward two Carbon Capture and Storage projects and improve the tax regime for shale gas are welcome steps towards achieving a balanced and secure energy mix.
“It is now essential that the Energy Bill gets onto the statute book as soon as possible to create investor certainty in all forms of energy.
“The move to exempt certain sectors from the Climate Change Levy is good news, as is the commitment to ensure that energy-intensive industries are shielded from new energy costs beyond this spending period.
“This is all the more important given the increasing difference between the cost of carbon in the UK and EU, and it is essential to ensure the competitiveness of our low-carbon industrial base.”
On industrial strategy: “Getting behind key sectors of our economy, such as aerospace, will help boost trade and investment.
“Providing further support for our world-beating creative industries, acting to incentivise the purchase and manufacture of low emission vehicles, and increasing the rate of the above the line R&D (research and development) tax credit will also have a material impact on some of the most important sectors of the UK economy.”
On tax avoidance: “Everyone should pay their fair share of tax. The tax system needs to be updated for the digital age, at a global level.”
On tax and procurement: “The Government’s original proposals to require companies to retrospectively declare their compliance with tax laws would have created confusion. The clarification that the rules will not apply retrospectively is therefore helpful."
On Fuel Duty: “The Chancellor was right to dig a little deeper into his pockets once again to help soften the impact of rising oil prices.
“Freight operators, small businesses and hard-pressed families up and down the country will feel the benefit of this freeze on fuel costs."
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