The Confederation of British Industry (CBI) has called on the government to use the upcoming Budget to set the tone for the post-Brexit business environment, and has requested tax relief for businesses investing in IT.
The CBI wants the government to use its taxation models to encourage companies to invest in the latest technology as well as support the tech supplies sector. It also called for an increase in the number of apprenticeships to address the UK’s skills shortage.
In a letter to the government, CBI director-general Carolyn Fairbairn said: “This year’s Budget is an opportunity to show the kind of country we are: enterprising, competitive, and committed to prosperity shared across all of society. We write to you, on behalf of our members, setting out the steps that business believes will make the most of this opportunity.”
The letter included a request for a review of the capital allowances regime next year to enable companies to receive tax relief on “newer technologies”. It also asked for a review of business rates to incentivise firms to invest in digital and new technologies.
Beyond supporting corporate tech investment, the CBI is keen to protect the competitiveness of the UK’s growing tech sector.
“An important challenge for government is to not damage the UK’s competitiveness unnecessarily and to keep a focus on digital to enable growth and prosperity across the economy,” said Fairbairn. “Digital and tech businesses are driving regional investment and innovation, with over 65% of tech capital invested in clusters outside London.”
She pointed out that all businesses are increasingly digitised, and the online marketplace is crucial to growth.
But businesses recognise that the digital revolution is not without its challenges, said Fairbairn. “The tax system is one area that requires modernisation to ensure it remains fit for purpose. The UK should continue to work closely with the OECD and the EU to design and implement a system that addresses the issue while supporting digital adoption. But the UK should not be tempted to take unilateral action which would undermine that work.”
Another post-Brexit fear for businesses is the potential shortage of people with the right skills, which is particularly true in the tech space.
To this end, the CBI has called on the government to make the apprenticeship levy work better.
“While investing in capital is vital, there will be no progress without also investing in our people,” said Fairbairn. “Businesses are united in the need to develop skills for the future, and high-quality apprenticeships play a pivotal role.”
She said the current apprenticeship levy is not working, with the most recent figures revealing a 40% drop in the number of apprentices starting. “Businesses are losing faith that the system can deliver the talent they desperately need.”
The CBI’s letter suggested the government should change this through policies such as increased funding and help for SMEs that want to take on apprentices.