Here’s how we worked with our members to shape change in the first half of 2024
Shaping change under a Conservative government
In March, the Spring Budget addressed several of our key requests, including confirmation that the super-deduction will be made permanent and giving childcare providers greater certainty on funding rates for the childcare rollout. Fully funded childcare facilitates the return of skilled workers to the workforce, enabling businesses to attract and retain top talent.
Working with the Labour party
On Monday, 8 July, Rachel Reeves gave her maiden speech to the Treasury, and many of the announcements were in line with our manifesto ask for a package of measures to transform the planning system.
Our members were clear: planning reform is desperately needed to unlock growth. After campaigning hard on these issues, we welcomed the announcements on planning from the Chancellor, including:
- A housing taskforce to turn mandatory targets into action
- Ensuring decisions on critical national infrastructure spending are prioritised with joined-up decisions between the Department for Business and the Department for Energy and Net Zero
- Ending the ban on onshore wind and bringing this into nationally significant infrastructure
- 300 new planning officers to make decisions quickly
- Using mayors and the Office for Investment (OFI) to make the connection between planning, infrastructure and investment
Many of these announcements reflected key asks from our manifesto and paper on Planning for Growth. Through the Going for Green report, the CBI was clear that removing the ban on onshore wind would green the UK's energy supply and help it to take advantage of a huge green-growth opportunity.
Our engagement with Labour while in opposition focused on addressing policy priorities and aligning with member positions. The CBI raised questions regarding certain aspects of Labour’s proposals, including engaging constructively with them on the employment reforms in their Plan to Make Work Pay.
A significant achievement for the CBI and our members was Labour’s announcement of its Business Tax Plan, which directly referenced many elements from the CBI’s 2023 Business Tax Roadmap. This plan offers businesses certainty in their tax treatment and safeguards crucial tax incentives essential for business investment.
Wins from the Spring Budget will boost investor confidence, workforce flexibility and progress devolution
Further funding for childcare guaranteed
What we delivered
In the 2023 Spring Budget, the Chancellor announced the extension of funded childcare hours to support increased parental engagement in the labour market.
In the 2024 Budget, the Chancellor confirmed, following representations from the CBI on behalf of our members, that hourly rates will be paid to childcare providers to support the delivery of the 30 hours funded childcare expansion. This commitment represents an estimated additional £500m of investment over two years. It demonstrates the government's ongoing commitment to supporting and incentivising parents returning to work, thereby enabling businesses to retain skilled talent.
What we’ll do next
The CBI will collaborate with the government to understand the specific rate given to providers for delivering the childcare expansion to 30 hours of funded childcare, and to assess whether that rate is sufficient. Additionally, the CBI will continue to support the overall implementation of this initiative.
Full expensing for leased and rented assets extended
What we delivered
Businesses that lease or rent capital assets, common in sectors like construction and agriculture, and prevalent among SMEs lacking the financial capacity to purchase assets outright, are currently excluded from full expensing. This exclusion inhibits vital investment and creates an uneven playing field.
Following the delivery of full expensing, the CBI’s headline recommendation for the 2023 Autumn Statement, the CBI began advocating for extending the policy to leased and rented assets through engagement in Treasury working groups, collaboration with trade associations, and surveys of businesses to highlight the positive impact an extension could have on investment.
In the 2024 Spring Budget, the government committed to extending full expensing to leased and rented assets when fiscal constraints permit and is consulting on the specifics of this extension. This move will enable these businesses to benefit from lower costs and to increase investment, thereby stimulating commercial activity.
What we’ll do next
The CBI continues to collaborate with HM Revenue & Customs (HMRC) and HM Treasury (HMT), maintaining pressure on the government to fulfil its commitment.
Devolution settlement secured
What we delivered
As a long-standing supporter of devolution and elected mayors, the CBI welcomed the announcement at the Spring Budget of a new Level 4 ‘trailblazer’ devolution deal with the North East Mayoral Combined Authority. Level 4 devolution provides each mayor with a single pot of funding, greater autonomy and more regionalised decision-making to fund opportunities and initiatives that will drive regional growth. This new level of devolution means more tailored support and resources for businesses, fostering an environment where they can thrive. Going forward, the CBI will support the roll-out of additional Level 4 devolution deals to all Mayoral Combined Authorities that seek them.
What we’ll do next
The CBI is committed to working alongside the UK Mayors Group to deepen our collaboration with Mayors and MCAs across England. Our goal is to power up every region of the UK, driving business investment and economic growth. We see a tremendous opportunity to forge a new strategic partnership between business and mayors, who as national leaders can drive impactful changes. The CBI believes that when politicians, the public and private sectors collaborate, each region can unlock its full potential.
The CBI will continue to advocate for additional trailblazer devolution settlements for Mayoral Combined Authorities that want them. We also aim to deliver a new industry-partnered Mayoral Economic Compact, aligned to a UK industrial and trade strategy, leveraging the transformational role of UK mayors. This initiative is designed to ensure that businesses receive the support they need to grow and succeed, while also contributing to the economic development of their regions.
Planning strategy delivered
What we delivered
Planning is a perennial issue that is stifling growth. The current system is considered too slow and cumbersome, adversely impacting the delivery of much-needed housing, infrastructure, and decarbonisation projects. If the UK wants to be a world leader in the built environment and unlock growth, this must change. Undertaking planning reform offers an opportunity to reinvigorate delivery and ensure planning is rightly treated as an economic enabler rather than a political issue.
In the Spring Budget, the Chancellor responded to calls from the CBI to develop an overarching strategy for planning by launching an accelerated planning system consultation. This initiative aims to unlock trapped investment by giving construction firms the confidence needed to invest in England’s housing stock, helping to alleviate the housing crisis and plan for vital national infrastructure. In Scotland the Government launched a consultation on resourcing Scotland’s planning system.
What we’ll do next
The CBI is launching an infrastructure working group focused on shaping CBI policy on critical national infrastructure. We will continue to urge the government to prioritise publishing a UK strategy for accelerating the delivery of key infrastructure projects to unlock investment and enable economic growth.
Catalysing change on the key levers of growth
Pension funding regulation improved
What we delivered
The government has improved the final regulations underpinning defined benefit (DB) pension schemes in line with the CBI’s recommendations.
The new regulations address member concerns that the regime would result in unnecessary overfunding and de-risking of DB pension schemes at the expense of employers' sustainable growth.
These improvements are based on the CBI’s response to the Department for Work and Pensions’ (DWP) consultation on the regulations, as well as two consultations on The Pensions Regulator’s DB Funding Code and multiple private meetings with responsible civil servants.
What we’ll do next
The CBI will continue to engage with members and the DWP as the new regime is implemented to ensure it operates effectively.
AI funding and ‘hub’ pilot to support businesses promised
What we delivered
The Department for Science, Innovation and Technology (DSIT) has responded to its AI White Paper consultation and committed to implementing several aspects recommended by the CBI in last year's consultation response.
This includes £10m to support regulator capacity, funding for a collaboration with the US, and moving ahead with a pilot 'AI and Digital Hub' (the CBI had suggested an AI Governance Hub). This will be a multi-agency service to support public and private businesses with regulatory guidance, and establish a new steering committee to coordinate with government and regulators.
What we’ll do next
The CBI will continue to work alongside DSIT to ensure the implementation of the White Paper response and any further consultations. Our members who are part of the AI and Data Protection Working Group will share their perspectives following the White Paper consultation response.
VAT relief for business donations consultation announced
What we delivered
On 18 April, the government announced it would publish a consultation on a new VAT relief aimed at encouraging businesses to donate everyday items to charity. Currently, businesses that donate goods (surplus/unsold stock, etc.) to charities face a VAT charge if those goods are given away for free.
Other organisations have been advocating for this VAT relief for some time. The CBI began developing its own version of the policy in 2023, leveraging its in-house tax expertise. The CBI included this proposal in the 2023 Autumn Statement and the 2024 Spring Budget submissions.
The tax team held meetings with HMT to discuss the CBI's proposal, which addressed many of HMT's concerns about the unintended consequences of introducing the relief. Notably, the CBI was the only body to provide a fiscal costing of the measure, a critical factor in HMT's serious consideration of the proposal.
What we’ll do next
The team will continue to collaborate with the CBI’s Indirect Taxes Working Group members to respond to the consultation once it is published.
In July, the CBI will gather member insights and continue meeting with HMT to fill any data gaps, enabling the Minister to approve the tax relief.
Regionalist approach to economic growth endorsed
What we delivered
We launched business manifestos in all 10 English regions holding mayoral elections, developed in partnership with CBI members and building on our general election manifesto which was published in November 2023. Manifestos were shared in advance with all mayoral candidates. In addition, working in partnership with the other main business groups, we organised electoral hustings in 7 of the 10 mayoral constituencies.
What we’ll do next
In July we will host our first mayoral summit, inviting all 12 English regional mayors along with a small number of very senior business leaders to develop a collaborative approach to inward investment and regional industrial policies. The Domestic Competitiveness policy team will continue to engage with mayoral combined authorities to help shape future economic growth strategies.
Planning system in Scotland accelerated
What we delivered
The Finance Secretary of Scotland, Shona Robison, has committed to accelerating the planning system. This initiative involves working closely with local authorities and business organisations to eliminate blockages in the planning process, thereby supporting projects in going live more swiftly. This success follows a one-to-one meeting between the CBI and the Finance Secretary in December 2023, held prior to the announcement of the Scottish Budget.
What we’ll do next
The CBI will continue to engage with the Finance Secretary, providing member insights to drive this initiative forward. Further discussions and collaborations with relevant stakeholders will be pursued to ensure the effective implementation of these changes.
Socialisation of connection charges to the grid in Northern Ireland indicated
What we delivered
Northern Ireland (NI) is the only nation within the UK and Ireland that does not have socialisation of connection charges to the grid. Members have highlighted this as an issue for investment in projects, as it places companies at a disadvantage compared to their neighbours in Great Britain and the Republic of Ireland.
The Minister for the Economy of Northern Ireland, Conor Murphy, has indicated that the government will introduce the socialisation of charges. The CBI in NI has been raising this issue with officials and political parties for several years. Specific examples include referencing it in recent consultation responses related to energy, raising it with officials at Energy and EV Working Group meetings, and responding to the Utility Regulator's call for evidence in 2023.
What we’ll do next
There will be further consultation on this issue, and the CBI’s NI team will engage with members to respond to these consultations as they are published.
Commitment to maintaining National Living Wage affirmed
What we delivered
The Conservative manifesto pledged to maintain the National Living Wage (NLW) at two-thirds of median earnings for each year of the next Parliament. This echoed the CBI's own Business Manifesto, which called for the NLW to be held at two-thirds of median earnings to protect the gains it had made towards equality. Simultaneously, this will give businesses more space to invest in the productivity growth required to raise pay sustainably.
The CBI has made numerous contributions to Low Pay Commission (LPC) NLW submissions and oral evidence sessions and participated in various meetings with key sector stakeholders, civil servants and officials.
What we’ll do next
The CBI will give oral evidence to the LPC in the autumn, which will include representations on the 2025 NLW rate and businesses' views on what the LPC's remit should be beyond 2025.
Influencing Labour Party policy
Business tax plan assured
What we delivered
Labour has committed to a business tax plan. This plan aims to provide certainty to businesses regarding their tax treatment, safeguard key tax incentives crucial to business investment, and enhance the UK's attractiveness for investment, business establishment and growth. It includes promises for significant reforms to business rates and the digitisation of the tax system, which are expected to boost productivity and lower barriers to investment.
The CBI's Business Tax Roadmap, published in July 2023, is referenced multiple times in Labour's business tax plan. The CBI's tax team engaged with Labour economic advisers and shadow ministers to emphasize the necessity of such a roadmap and to provide input on its content.
What we’ll do next
The CBI will continue collaborating with Labour, as well as other political parties, to ensure cross-party consensus regarding the importance of a comprehensive tax plan.
Business rates reform pledged
What we delivered
In their 2024 manifesto, the Labour Party pledged to overhaul England's business rates system — a longstanding priority for the CBI. Members voiced concerns over the current system: it discourages investment in commercial properties, adds unnecessary complexity and burdens businesses with administrative hassles. The uncertainty it creates also hampers growth opportunities. Labour's proposal aims to create a system that encourages investment, tackles vacant properties and supports entrepreneurship. The CBI actively collaborated with Labour, including hosting James Murray MP, then Labour's Shadow Financial Secretary to the Treasury, for a roundtable discussion. These engagements were vital in keeping Labour informed about our ongoing business rates reform project.
What we’ll do next
Looking ahead, we'll work closely with Labour to push forward with business rates reform. Our strategy will be guided by insights from our ongoing business rates reform project, aimed at making the system fairer and more competitive for businesses across England.
Long-term strategy to deliver infrastructure projects created
What we delivered
The future of delivering critical national infrastructure has become uncertain. Examples include the cancellation of HS2 north of Birmingham and ongoing concerns about major net-zero projects such as carbon capture, utilisation and storage, and further offshore wind development.
The CBI contributed to Labour's consultation with industry, including on the Major Projects Capital review reflecting the views of its members, including a key recommendation to boost institutional oversight via stronger central coordination through the Major Projects Group.
Following a consultation, Labour has proposed merging the National Infrastructure Commission and the Infrastructure and Projects Authority into a new body: the National Infrastructure and Service Transformation Authority (NISTA). NISTA would be responsible for developing and delivering a long-term strategy for critical national infrastructure. If implemented, this should provide greater long-term certainty, allowing firms to plan for workforce development, build supply chains and ultimately manage costs more efficiently.
What we’ll do next
The CBI will convene its new Infrastructure Working Group to make sure we're vocal on member priorities, and we'll continue to engage with Labour and the opposition to progress change.
Apprenticeship Levy reform promised
What we delivered
Many members of the CBI consider Apprenticeship Levy regulation to be too rigid, resulting in inefficient or unused funding. The Apprenticeship Levy has failed in its purpose to increase training numbers and, in the minds of numerous employers, is unfit for purpose.
Labour will reform the Apprenticeship Levy and create a more flexible Growth and Skills Levy. The CBI has continuously made the case, both publicly and privately, that there is a need to increase the flexibility that employers have via the Levy to fund training. We’ve lobbied Labour directly and indirectly on this matter.
What we’ll do next
Skills England (Labour’s proposed body to bring together business, training providers and unions with national and local government to ensure the country has the highly trained workforce needed to deliver Labour’s Industrial Strategy) will determine eligible courses in addition to apprenticeships that the Levy can be used for. There is a need to ensure a sense of urgency in setting up this body and adjusting the Levy, so that the implementation of the change does not drift.
Our policy makes an impact because it's impartial, cross-economy and fully-costed. In the Sunday Times annual ranking of economic forecasters, the CBI’s Economic Intelligence team was ranked among the top three most accurate forecasters of the UK economy for 2023.
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