Delivering for members through turbulent times

With many firms dealing with high levels of staff absence due to self-isolation, the CBI persuaded the government to reduce the self-isolation period from 10 days to five, helping to keep businesses running and the economy open.

The CBI and its members heavily influenced the government's approach to living with COVID-19, giving firms more certainty to plan, invest, and grow.

Since Russia invaded Ukraine on 24 February, the CBI has been providing an essential link between business and government, helping to shape sanctions and ensure the government’s actions had business support. In addition, by giving members the latest insights and resources on sanctions, the economic impact, and supply chain disruption, the CBI has helped firms prepare and adapt their operations, saving them time and money. The CBI has also been working with members on the humanitarian response to the crisis.

Continued restrictions on international travel due to the COVID-19 pandemic were giving many businesses serious operational challenges. The CBI gave insights on the impact of these restrictions to the government, and on 14 March the government announced the removal of the remaining COVID-19 international travel restrictions for all passengers from Friday 18 March.

Since the beginning of the pandemic, businesses have been able to conduct right to work checks virtually. However, this was only intended to be a temporary measure. CBI members were worried that reverting to the old system would slow recruiting and onboarding processes down significantly. As a result, the government has made digital right to work checks permanent, meaning faster hiring processes and wider talent pools for firms.

With the UK labour market facing significant labour and skills shortages, the CBI began highlighting to government the impact this was having on businesses.

In particular, the CBI Economics report – produced in partnership with the Recruitment and Employment Confederation – gave several recommendations which the government has agreed to look at, including a review of the potential loosening of immigration rules.

The Energy Price Guarantee for households was warmly welcomed by the CBI, but with commercial energy bills uncapped, many businesses were terrified of the impact of drastically rising energy bills.

As a result, the CBI shared insight with the government on the scale of energy prices that firms were facing, and the government delivered, announcing the Energy Bill Relief Scheme for businesses, easing short term concerns about otherwise viable businesses having to close.

The CBI has long called for reform to the UK’s business rates system. For too long, the system has created barriers and distortions, hampering business investment and holding back growth.

In the Autumn Statement, the Chancellor revealed two new measures to support business, both of which the CBI successfully argued for.

Firstly, the government will freeze the business rates multiplier for another year, which is worth £9.3bn over the next five years.

Secondly, the government has reformed the Transitional Relief for Businesses. This includes abolishing downwards transitional relief caps, which means businesses who see lower bills due to the revaluation will benefit straight away. In addition, a £1.6 bn scheme has been announced to provide upward transitional relief caps to ratepayers facing large bill increases following the revaluation.

Some 800,000 companies were registered in the first year of the pandemic, adding more than £20bn to the UK economy. There was little understanding from government about the type of support that these businesses needed during this difficult time.

To highlight the issues facing these businesses, the CBI delivered a report in partnership with NatWest, which showed both the government and other businesses where these firms needed support, such as with access to finance. This report has helped to reaffirm the UK as a proven hub for entrepreneurship, even in challenging circumstances.

The government’s Help to Grow scheme – designed to provide businesses with free and impartial information and support to help them adopt new software – had initially been limited in its eligibility criteria and scope. This meant that a limited number of businesses could benefit from the scheme.

Following representation from the CBI, smaller businesses under 10 employees can now participate, receive discounts, and access personalised advice. This opened the scheme up to an additional 1.1m businesses, an increase of over 800%.

Continued uncertainty surrounding the future of funding for TfL was impacting businesses, particularly those within TfL’s supply chain. There was also a risk to the capital’s international competitiveness and business investment.

The CBI featured the importance of TfL funding in various budget submissions and engaged directly with the government, helping TfL secure a new funding settlement. The new settlement will ensure TfL can continue to play its role as a key enabler of growth and prosperity across both the capital and the wider UK.

The closure of the Green Homes Grant meant a vacuum of policy support for the rollout of domestic energy efficiency, drying up supply chains and leaving millions of households even more vulnerable to high energy costs.

The CBI managed to persuade government that the scheme needed replacing, and the government listened. New government support for energy efficiency will help kickstart consumer demand and enable a nationwide effort on retrofitting, creating significant opportunities for businesses in this sector.

During the 2022 party conference season, the CBI delivered a comprehensive programme of political engagement to ensure the voice of business is heard.

CBI representatives – along with the Chancellor and Treasury Ministers – spoke at 26 fringe events and attended six business dinners. The Director-General of the CBI, Tony Danker, met with the Chancellor; and the President of the CBI, Brian McBride, met with Shadow Chancellor Rachel Reeves.

We also held a growth fringe event with Steve Baker, Gerald Lyons, Kate Andrews, and Pfizer. Finally, we had nearly 40 one-to-one meetings with members and 18 with the media – further increasing the CBI’s visibility and presence alongside the two main political parties.

The UK retail sector is a stalwart of the economy, a constant presence across both our high streets and our online lives. However, it has also been hit hard by the pandemic, and other global pressures such as the war in Ukraine and the cost-of-living crisis have hit consumers and businesses alike.

CBI Economics worked with some of the largest household names from the UK retail and wholesale sector to investigate the benefits that the sector delivers to the economy, and what they’re doing to support both households and employees up and down the country.

Our work helped retailers to be able to engage with policymakers at the heart of government and demonstrate their contribution to the UK economy and to help achieve their strategic policy asks.

As the new rate of Corporation Tax (CT) was announced, members flagged the disadvantage that would be faced for those using the R&D tax credit scheme for large businesses.

Consequently, the CBI called for the RDEC scheme to be increased - to offset any deductions in value resulting from the CT increase - through representing the policy and raising the negative impacts it would have within our fiscal submissions and discussions with HMT officials, and, in evidence to the Commons Science & Technology Committee on R&D Policy, and Lords Finance Bill Committee.

The government subsequently announced it will increase the RDEC rate from 13% to 20% and the CBI continues to work with them to ensure the R&D tax credit is competitive and supports SME innovation.

The CBI continued its campaign for growth and stability through public and private calls for the government to maintain critical capital spending – including direct representations made to the Chancellor during pre-Autumn Statement meetings – as we know protecting public spending is integral for higher private sector investment.

This is especially important for capital spending across infrastructure projects – such as rail and broadband – to maintain the overall commitment to increase public R&D investment to £22bn by 2027. Together, these will directly improve the connectivity and productivity of our nations and regions.

At the Autumn Statement, the Chancellor re-committed to key infrastructure projects such as HS2, Northern Powerhouse Rail and East West Rail, and to increasing R&D public spend.

The CBI has worked extensively with industry and government on reforming Solvency II to better suit the needs of the UK’s insurance market and allow the sector to play a bigger role in the economy.

Alongside the Autumn statement, HM Treasury released its final proposed reforms to the UK’s regulatory regime for insurance, Solvency UK, which has been warmly welcomed by insurers.

These reforms are designed to unlock tens of billions of pounds for investment across a range of sectors and should allow insurers to invest more in infrastructure and net-zero projects to help the UK meet its growth ambitions.

On 7 February, Change the Race Ratio, the CBI co-founded campaign to help tackle the low levels of ethnic diversity on UK Boards, reached the milestone of 100 signatories. With more businesses on board, the UK is closer to unlocking the potential £24bn boost from achieving full representation.

The CBI fed into the government's consultation on the development of a hydrogen business model to supercharge private investment in new low carbon hydrogen projects, and the government listened - publishing a Hydrogen Investor Roadmap on 8 April.

Prior to the publication of the levelling up white paper, the CBI fed into the government’s consultation. The government accepted the CBI’s view that business-driven economic clusters can be a catalyst which brings the UK’s levelling up ambitions to life. And since then, the CBI’s programme of work to advance clusters around the UK has been advocated by the government.

Businesses have been waiting a long time for a new Digital Strategy to set out the government’s vision and unlock certainty, clarity and investment across the digital economy. Since 2019, the CBI has been championing the interests of businesses and shaping the new strategy. Business now has a clear cross-government vision and roadmap for the UK’s future as a leader in digital technology. The strategy also provides a new avenue for firms to directly engage in, and troubleshoot, digital regulation concerns through the CBI.

The CBI has long been a supporter of the development of a sustainable aviation fuels (SAF) industry in the UK. Despite the government’s commitment to decarbonising the UK’s aviation industry, businesses were uncertain exactly what this entailed.

Following the CBI’s response to the Department for Transport’s consultation on net-zero aviation, the government announced its ‘Jet Zero’ strategy – setting out how we will achieve net-zero aviation by 2050. The strategy – which includes solutions such as regular delivery plan reviews alongside a newly installed Charter, has given businesses the certainty that they need.

The government commitment to establishing the Advanced Research and Innovation Agency (ARIA) to deliver funding for high risk, high reward innovation, hadn’t materialised in practice.

The CBI highlighted that this was causing a significant gap in the innovation landscape. As a result, the government committed a budget of £800m to the ARIA over four years and appointed a Chief Executive and Chair.

The Export Support Service (ESS) – which helps UK businesses get answers to questions about exporting their products or services to customers in Europe – had previously used advisors with scripted answers. This gave minimal help to businesses who needed support to start their exporting journey.

The CBI stressed the importance of having experts who could better support SMEs. Now, the ESS will have much-improved practical advice for exporters. In addition, it has now been rolled out globally, as opposed to just focusing on exporting to the EU.

Without continued access to Horizon Europe funding, the UK will lose out significantly on public funding for research and innovation. On top of this, the networks, international partnerships, and opportunities to shape research direction offered by Horizon are unique and will be extremely difficult to replicate within the UK.

After the CBI highlighted this issue, the government has committed to providing a guarantee for funding, so those who already have received Horizon grants will not lose out on the money they have been awarded.

The CBI has also been working closely with BEIS and UKRI to influence on the development of a domestic alternative research and innovation programme. We have provided members the opportunity to feed directly into government officials on the formulation of the programme, which with their feedback, will now strongly support business innovation.

The CBI-led Trade in Services Council was founded in early 2022 to champion the importance of services trade to the UK economy, and to identify common barriers to trade across different sectors.

With momentum gathering, the Council played a fundamental role in the Department for International Trade’s “International Trade Week”, further advancing member priorities in this area – such as promoting the importance of services to the UK economy and demonstrating best practice.

Data shows the UK loses 131 million working days a year to ill-health, costing the nation around £180bn in GDP. But industry interventions in the working age population can reduce levels of ill-health by up to 20% by 2030.

As a result, the CBI – working with Business for Health and supported by the NHS and the government – launched the first iteration of the Work Health Index (WHI) to benchmark private sector health provision across the economy.

The WHI will help firms understand their competitiveness and enhance their employee value proposition. In the longer term, it’ll help businesses to create better work environments and support better health outcomes across the working age population – resulting in elevated workplace productivity.

The CBI has consistently called for the UK to get serious about investment in energy efficiency for households, to help bring down bills for households and achieve our decarbonisation targets, by committing additional support for an ECO+ scheme.

Subsequently, the Chancellor announced the creation of a new ECO+ scheme running from spring 2023 for up to 3 years. To further support energy efficiency investment the government reaffirmed its commitment of £6.6bn, and new funding from 2025 to 2028 of a further £6bn to deliver the new national ambition. To achieve this target the government announced a new Energy Efficiency Taskforce (EETF), charged with delivering energy efficiency across the economy.

The CBI recognises the role of new large-scale nuclear to support the decarbonisation and resilience of the UK’s energy system, and the Government’s ambition to reach Final Investment Decision on at least one large-scale nuclear power station this Parliament.

In November, the Sectary of State for BEIS confirmed the government’s commitment to Sizewell C – a key strategic project that the CBI has long supported – in the form of a £700M, 50% stake.

Specifically of strategic importance to the East Anglia region, the project will deliver over 10,000 highly skilled jobs and associated supply chain benefits, while the UK as a whole will benefit from a more secure and resilient energy system.