Winning for business through challenging times

The CBI played an integral role in securing workplace testing funding for businesses in England, alongside improved guidance across all UK nations. This followed extensive engagement across the business and health departments, Cabinet Office and HM Treasury. In these conversations, the CBI argued that comprehensive and government-backed workplace testing was a key tool in the UK’s fight against COVID-19, enabling those unable to work from home to operate safely.

Through the UK government Brexit taskforce meetings and Northern Ireland lobbying, the CBI called for a NI specific taskforce to provide NI businesses with a direct voice on transition issues such as the VAT margin scheme and groupage.

Small and medium-sized enterprises (SMEs) initially faced a barrier to the Kickstart Scheme due to the requirement to use an intermediary Gateway unless they were creating 30 or more placements. The CBI fought for SMEs, highlighting member feedback of delays and the risk this requirement posed to business engagement to the Department for Work and Pensions (DWP). The government has since made the process easier by allowing SMEs to apply directly.

UK companies had limited access to trade in individual US states due to regulatory barriers governed at state level. Fuelled by member feedback, the CBI’s Roaring Trade report, called for a holistic approach to US trade and a comprehensive strategy on state-level engagement to benefit services firms. Following these calls and regular engagement by the CBI, the government has started signing agreements with individual US states, making it easier for firms to gain access to individual markets in the US as UK qualifications will be recognised as legitimate.

Ongoing COVID-19 restrictions resulted in retail, hospitality, leisure and aviation firms facing extreme cost pressures. Following the CBI’s Scottish Budget submission and meetings with senior government ministers and officials, firms in these sectors will benefit from an extension of business rates relief, meaning they will pay no business rates during 2021-22 to help them manage the economic impact of the pandemic.  

Businesses and local leaders have faced uncertainty due to a lack of tangible progress towards the development of the Arc. Having listened to members in the region, the CBI championed the development of the Oxford Cambridge Arc because it has the potential to drive business growth, prosperity and international competitiveness. The government has since set out their intentions to create a long-term framework to coordinate developments and create a Growth Body. These measures will increase certainty for business investment linked to the Oxford Cambridge Arc and East West Rail.

Recognising the necessity of strong data protection, the CBI responded to the government’s consultation exploring whether to introduce 'opt-out' representative action for data protection complaints. The CBI’s response, based on member insights, led to government maintaining the current data protection regime as it relates to class action. This action helped businesses to avoid facing a rapid and unfeasible acceleration in meritless data protection related claims.

Following extensive consultation with members, the CBI wrote to Business Secretary, Kwasi Kwarteng, and devolved nation ministers, identifying six economy-critical factors to help firms plan with confidence and limit unnecessary uncertainty when emerging from the pandemic. The Prime Minister adopted many of these recommendations in the UK government’s Spring COVID-19 Roadmap. These included a timeline for the easing of restrictions and commitments to work with business to develop detailed plans for harder to fully reopen sectors as part of economy, such as live events and international travel.

CBI members were struggling to access financial and training assistance to adopt technologies and stimulate productivity. COVID-19 challenged cashflow even further, so the CBI raised this challenge with Innovate UK and HMT. With Innovate UK, the CBI proposed monthly rather than quarterly grant payments, which led to businesses receiving eligible innovation project funding quicker. With HMT, the CBI called for the government to create a “productivity voucher scheme” to address firms lacking the capital needed to invest in vital tech and training. The Help to Grow scheme was announced at Budget, which will give businesses financial and training assistance for innovation adoption.

With firms facing a spring cliff edge in financial support, the CBI called for a raft of measures in its Budget submission to help businesses survive until the economy reopened. This led to the government extending the Coronavirus Job Retention Scheme and Business Rates relief. The Spring Budget also reflected the CBI’s ask for temporary tax loss carry backs for exceptional COVID-19 losses, a new Recovery Loan Scheme and flexible loan repayments for Bounce Back Loans. These extensions and initiatives acted as a lifeline to many firms and continue to support businesses in recovery.  

After a year battling the pandemic, business investment in the UK has fallen substantially. The CBI used its Budget Submission to call for measures to spur business investment to drive a balanced economic recovery, which the CBI’s Director General also discussed with the Chancellor prior to the Budget. At the Budget, the Chancellor announced the super-deduction tax incentive, which allows companies to cut their tax bill by up to 25p for every £1 they invest, an historically unprecedented level of relief for plant and machinery investments. Ultimately, this incentive will help firms bring forward investment plans. 

To help deliver the infrastructure that the UK needs to both level-up and decarbonise the economy, the CBI’s Investing in infrastructure report called on government to create a new Infrastructure Bank. The Treasury confirmed the bank’s creation in the March budget and the CBI is now working closely with government to ensure the new institution has the maximum impact, delivering key investments across the UK’s regions and nations and crowding in more private finance to make the UK infrastructure market globally competitive.

At the beginning of the year, the government introduced a new staged approach to imports through the Border Operating Model (BOM). While there were still considerable immediate changes that importers needed to adjust to, the BOM introduced some of the most significant changes in stages. With firms tackling the second lockdown’s impact at the same time, it became clear that it would be difficult for them to prepare for the first stage of the new approach to imports due in April 2021. The CBI privately called for action ahead of the grace periods ending, which led to the government adding a six-month extension to each stage of the BOM.

The CBI has been campaigning for an independent Fiscal Council since 2015, to help promote greater financial discipline. The CBI has continued to raise this with the Finance Minister since the re-establishment of the Executive in 2020. Following consistent engagement, the Finance Minister announced the council’s launch to provide greater transparency and independent scrutiny to the Executive’s finances. It will be a stand-alone and permanent body, initially focusing on the Executive’s draft 2021-2022 Budget.

Firms needed clearer policy plans to reduce industrial emissions, specifically policies to support new low-carbon technologies, like carbon capture and hydrogen. CBI member insight played an important role in the creation of the Department for Business’ Industrial Decarbonisation Strategy (IDS), which saw many of our recommendations adopted. The strategy’s recommendations included clarity on the UK Emissions Trading System, a vision for low-carbon industrial clusters, potential new product standards, and business models for low-carbon hydrogen, which the CBI called for. These will help unlock the investment and drive the rate of change required for achieving net-zero.

Prior to the Budget, businesses felt that previous consultation on the R&D tax credit had not gone far enough. Some firms also had significant concerns on the design of the uncertain tax positions disclosure proposals. Following CBI recommendations to re-consult, HMT and HMRC announced the release of several consultations on various parts of the tax system, including second consultations on R&D tax credit and the disclosure of ‘uncertain tax positions’. This is a welcome development that demonstrates government listening to business concerns, and providing the opportunity to contribute meaningfully to future policy in these areas.

Budget announcements meant the UK’s association to Horizon Europe would lead to a shortfall in the domestic R&D budget without further action, so the CBI called for additional funding for association to Horizon Europe. Following calls and significant engagement with key stakeholders to set out the potential damage of the UK's science and innovation ambitions, the government announced alternative funding to meet the cost of association to Horizon Europe. This public investment in R&D has protected programmes, funding, underpinning capabilities businesses depend on. 

Prior to the Listing Review, firms shared that there was a lack of an innovative culture that encouraged businesses to seize the opportunities presented by a wider range of finance options to unlock growth and investment. As part of a consultation, the CBI highlighted this view to the Treasury, which led to recommendations being accepted that will help businesses get the finance they need to grow. The listings regime will play a critical role in strengthening the UK’s position as a leading global financial centre as well as unlocking vital growth and investment across the whole economy.

CBI members were facing the creation of a rigid investment screening regime. As a result of private engagement by the CBI, the government introduced a series of amendments at report stage to the Bill, reflecting two of the CBI's asks. The amendments remove a proposed threshold over which investment or voting rights would trigger a review and provide clarity on the processing time of claims through a new reporting mechanism written into the Bill. These changes will make the Bill more business-friendly and focused on the implementation of the new regime. 

Devolution plays a vital role in raising the profile of a region, attracting inward investment as well as allowing locally tailored support that can help businesses grow and thrive in the future. However, English devolution requires further development. The CBI has long called for further devolution and the government is making progress on the CBI’s target of 60% of the English population to be covered by a devolution deal by 2025. The recent election of the West Yorkshire metro mayor brings the total to 40%. With LEPs also serving as a core part of local empowerment, the CBI has welcomed the government launching the LEP review to address long-standing inconsistencies of purpose, delivery and services offered across LEPs.

Legal questions surrounding employers’ obligations to their staff remained unanswered as businesses prepared to adopt hybrid working for when offices reopen in England and Wales. The CBI highlighted business concerns through the Flexible Working Task Force and to the Welsh government, which led to published guidance sharing practical advice for firms helping them to be more confident when adopting hybrid working and breaking down the key areas to focus their transition on. Additionally, in response to the unprecedented mental health challenge affecting businesses and their employees alike, the CBI responded with a practical guide detailing key steps employers can take to improve overall wellbeing, with emphasis on firms championing mental health from senior level, targeted action towards early interventions and a healthy culture that prioritises the wellbeing of staff.

A year into the pandemic, business travel is still facing restrictions. The nuances of the Trade and Cooperation Agreement mean the requirements for business travel vary depending on the member state, therefore businesses needed a ‘country-by-country’ understanding of what is and isn’t permitted. When borders reopen, complying with the new rules will be extremely challenging and resource intensive for many businesses. From March, the CBI called for country-by-country guidance to business travel, and the government began to publish this guidance on their website from 30 April. This has provided much needed clarity to businesses– particularly SMEs without large HR departments.

With a strong desire and need for regional revival plans, the CBI published manifestos for newly elected metro mayors with several recommendations being taken forward across the English regions. Andy Street, the West Midlands mayor, has committed to maximising the benefits of Coventry City of Culture in 2021 and the Birmingham Commonwealth Games in 2022, as well as backing HS2. All in line with the CBI’s calls for the mayor to promote regional, national, and international tourism and travel to the West Midlands. Similarly, in Greater Manchester, Andy Burnham has developed an economic recovery framework where he is set to prioritise a green recovery, inclusivity and job creation, as called for by the CBI. In the West of England, following the CBI’s calls for a Green Recovery Fund, the newly elected metro mayor, Dan Norris, has confirmed its creation. Each of these local commitments will drive regional prosperity and help secure a sustainable recovery.

The World Trade Organisation (WTO) has historically been poor at incorporating business engagement, with just a single event each year and no formal structures. As Chair of the B7, the CBI recommended this be addressed with more structured business engagement on an ongoing basis. The WTO Director General has since responded to the recommendations with a commitment to exploring a new business advisory council. This engagement will enable clearer lines of input into the WTO, allowing initiatives to be based on business priorities and ultimately improving the international trading system for companies.

Businesses have consistently shared frustrations about the skills system not providing the training and development of skills they require. Following extensive private consultation with the CBI, government set out its Skills and Post-16 Bill in May, placing a strong emphasis on developing an “employer-led” skills system. Proposals in the Bill, such as the development of College Business Centres and a Lifelong Loan Entitlement respond to the CBI’s Learning for Life recommendations. They will make it easier for SMEs to collaborate with colleges and support adults to invest in reskilling.

CBI members have been calling for reforms to the current fares structure within rail and for an improved governance structure to tackle the current fragmentation between track and train. Through the CBI’s Future of Commuting campaign, CSR and Budget submissions and extensive political engagement, the CBI pushed the government to press ahead with publishing a new strategy for the industry that will enable it to meet the needs of modern businesses – low carbon, reliable services, with a reformed fares proposition for passengers and improved track access for rail freight. The Williams-Shapps Plan for Rail is the strategy needed to deliver these changes and has been welcomed by the rail industry and the wider business community will now expect action to provide low-emissions connectivity for all.

In early 2020 the Parker review reported slow progress in improving ethnic diversity on the boards of the UK’s largest businesses. In October 2020, the CBI and 14 founding business partners launched the Change the Race Ratio campaign to accelerate progress. The campaign champions the Parker review targets, with signatories committing to make tangible change and to publish; targets (board and leadership), ethnicity pay gap reporting and action plans with clear timelines for change. To date, over 90 businesses have committed to change the race ratio in their business and over 20% of signatories are FTSE100/250 businesses.

Firms need to make structural adjustments to their workforce when business models change. For many, this has been exacerbated by the COVID-19 pandemic. Media interest and trade union activity led the government to review dismissal and re-engagement practices. Following representation from the CBI, the government decided that it is not necessary to change the law, recognising that there are circumstances in which employers may need to dismiss and potentially re-engage staff. The government has committed to more good practice guidance to support employers.

As soon as the government announced a delay to step four of the roadmap out of lockdown, firms required further support and breathing space. Following CBI calls, the government extended workplace testing and the commercial evictions moratorium (both in England only), alongside the continuation of digital Right to Work checks. These extensions provide firms which much needed support as they continue to recover.

With businesses concerned that they would not be able to transfer data between the UK and the EU after 31 June, the CBI argued for a data adequacy agreement. The European Council approved UK/EU Data Adequacy before the end of the grace period. The agreement will underpin the free flow of data between the UK and the EU, critical for businesses across the economy, from automotive to logistics, playing an important role in the everyday trade of goods and services as well as the development of innovative technologies such as AI.

Rail operators were faced with an inability to give passengers more adaptable travel options, and with CBI member insight highlighting an increase in hybrid working in the aftermath of the pandemic, the CBI campaigned for change. Through our Spending Review and Budget submissions, as well as calling for flexibility in our Commuting campaign asks, the CBI secured a more flexible season ticket for passengers, making rail more affordable in light of new ways of working.