CBI urges Chancellor to double down on support for high growth industries

Ahead of this week’s Budget, the CBI has called on Chancellor Jeremy Hunt to use targeted fiscal and regulatory levers to support the industries that will power sustainable economic growth in the years to come.

Across green industries, life sciences, digital technologies, creative industries and advanced manufacturing, the UK boasts a powerful growth engine encompassing some of the world’s best makers and innovators.

But, with fierce global competition for jobs and investment in these sectors, it’s a platform that requires government support to ensure the UK stays ahead of its rivals and maximises the country’s growth potential.

To help these sectors thrive and grow, the CBI has urged the Chancellor to consider the following zero and low-cost measures:

Green industries  

• Commit to developing a Net Zero Investment Plan that will provide the certainty needed to crowd-in private finance.
• Further extend the plug-in van and truck grant beyond 2025 to support the decarbonisation of commercial vehicles.
• Announce VAT reforms on public charging to incentivise the uptake of zero emission vehicles by reducing the rate of VAT levied on public EV charging to 5%.
• Update the UK’s green finance roadmap to signal to global markets that Britain’s financial services industry can play a leading role in the transition to net zero.

Life sciences  

• Recommit to spending £20bn on R&D in 2024/25 – raising this to £22bn by 2026/27.
• Bring capital expenditure on plant and machinery within the scope of R&D tax credits to create a truly world leading investment regime.
• Rethink the approach to the Voluntary (VPAS) and Statutory schemes for branded medicines pricing and access to ensure the UK remains a world leader in life sciences.
• Bring forward a proportion of the allocated funding for the Advanced Manufacturing Plan (AMP) to 2024/25 and include development research within the scope of qualifying spending.

Digital technologies  

• Increase the total that can be raised from the Enterprise Investment Scheme for Knowledge Intensive Companies from £20m to £30m to support R&D intensive scale-ups to grow.
• Ensure sufficient funding and government focus to fully implement recommendations from recent official reviews and policy papers on the regulation of innovative technologies and sectors.

Creative industries  

• Cap the increase in England’s business rate multiplier (reducing the increase to 2.8% instead of 6.7%) from April 2024 to prevent film studio spaces becoming commercially unviable.
• Use the new capabilities in the AI Regulation White Paper consultation response to confirm a balanced approach to AI regulation which stimulates innovation while respecting rights holders.

Advanced manufacturing  

• Extend full expensing to cover leased and rented assets.
• Bring capital expenditure within the scope of R&D tax credits.

Louise Hellem, CBI Chief Economist, said: 

“The UK’s ability to boast a range of innovative high growth sectors is rightly the envy of the world and represents an incredible engine for powering sustainable growth. But it’s also a platform that requires careful curation and cultivation.

“In an era of footloose capital and increasingly mobile talent, we need to act urgently and decisively to ensure the UK doesn’t lose vital ground on rivals desperate for their own slice of the pie.

“The Autumn Statement set out plans for how the UK can compete to win across five growth sectors – but momentum is key. The Budget represents the perfect opportunity to double-down on these industries by setting out key measures to unlock their future success.

“By delivering policy certainty, bolstering investment incentives and empowering sector champions, the Chancellor has the low-cost tools needed to help these critical sectors deliver opportunity and prosperity for decades to come.”