Chancellor urged to ‘unleash green markets’ in Autumn Statement

With the 2023 Autumn Statement fast approaching, the Confederation of British Industry (CBI) has urged Chancellor Jeremy Hunt to ‘unleash green markets’ to drive long-term prosperity and sustainable growth. Here, we consider the business group’s proposals, highlighting some key measures that could feature in Mr Hunt’s Autumn Statement speech.

Utilising green policies

One of the CBI’s key proposals is for the government to realise the UK’s net zero growth opportunity. It has urged the Chancellor to decrease waiting times to build electricity transmission infrastructure and also speed up the process for becoming connected to the grid.

A ‘more strategic approach’ to energy planning should be taken alongside the introduction of new Net Zero Investment Plan for the UK, the CBI states. The business group also advocates introducing a targeted ‘green’ super-deduction for incorporated and unincorporated businesses, with a first-year allowance of at least 120%.

Proposals to mitigate carbon leakage before 2024 should be brought forward, the CBI adds.

Making full expensing permanent to unlock investment

The CBI is urging the Chancellor to make full expensing permanent to ‘unlock business investment across the economy’. Analysis carried out by the CBI showed that permanent full expensing could help to drive investment by 21% and increase GDP by 2% by 2030/31.

Investment decisions can take years for many large firms, the business group said, beyond the current three-year window for full expensing. It argues that firms require certainty that it will continue.

Mobilising the potential of the UK’s workforce

The CBI is calling for the government to ‘remove barriers to work’ and help people gain the skills they require for the jobs of the future. It also recommends supporting firms to enhance their productivity through the adoption of new technology.

In its Autumn Statement submission, the CBI is urging Mr Hunt to announce a two-year pilot to turn the Apprenticeship Levy into a ‘Skills Challenge Fund’ to allow businesses to spend on a ‘more flexible variety of accredited training’ to support upskilling and the productivity growth the UK economy requires.

The CBI is also pushing for non-taxable health support for employees to be expanded, especially for mental health by making all Employee Assistance Programmes (EAPs) a tax-free benefit.

Using business investment to boost productivity

The CBI is calling on the government to create an environment that ‘unlocks business investment in service of sustainable growth’. It outlined a need for a tax environment that incentivises investment and innovation, calling for a freeze to business rates in England and Wales to prevent them rising with inflation.

An internationally competitive Research and Development (R&D) tax credit scheme should be introduced bringing capital expenditure and social sciences in scope, replicating schemes already in place in Ireland and France.

With green issues frequently making headlines, the Chancellor is likely to address the subject in his Autumn Statement speech on 22 November. Mercia will be keeping you up to date on all the Autumn Statement announcements. Keep your clients up to date with our range of digital products.