Budget should promote investment and exports

The CBI’s Budget Submission calls on the Chancellor to prioritise measures to boost business investment and trade.

John Cridland, CBI Director-General, said “The economic recovery is taking hold with businesses and consumers both feeling more confident but we must make sure that it really takes root and this can only be done through rebalancing.

“There are encouraging signs that business investment and net trade are on the up and now is the perfect time for the Government to get full square behind it, particularly in the case of smaller firms.

To help firms access the finance they need to grow and to boost alternative sources, the CBI is calling on the Government to:

  • Introduce an incentive for holding individual equity holdings beyond five years, which could be achieved by applying a relief on Capital Gains Tax
  • Make the successful Seed Enterprise Investment Scheme (SEIS) permanent.

The Government should also review other barriers to finance including:

  • Reviewing the level of collateral held at the Bank of England for banks to access the payments system
  • Boosting the take-up of retail bonds by keeping compliance costs down
  • Ensuring that forthcoming regulation of the crowd-funding and peer-to-peer lending is proportionate.

Mr Cridland said: “We need to nurture the UK’s vibrant alternative finance market and encourage even more competition in banking so that businesses can get growth capital.

“Equity finance could play an important role in longer-term capital but the take-up in the UK is behind the EU average and well behind the likes of Sweden and Norway. Many smaller firms say they would be more likely to use equity finance if the investment was longer-term, which is why we want a tax incentive to encourage this.”