CBI calls for ‘three or four industrial Olympics’

Outlining £700m of tax cuts and £800m of spending proposals to help businesses deliver the recovery, the employers group also said that George Osborne would do better to abandon his golden rules on public finances than to add more austerity to meet them.

Stressing that business was “rock solid” behind the Chancellor’s deficit reduction plans, John Cridland, CBI director general, said: “Conviction comes from sticking to what you said you would do. I would not do any more austerity to achieve an arbitrary target even if it means only missing it by a few months.”

The CBI is the latest in a growing list of institutions to advise the Chancellor to drop his target of having debt falling as a proportion of GDP by 2015-2016 rather than to impose more austerity, reports The Telegraph.

All the Government’s efforts should be focused on growth, Mr Cridland said, including infrastructure projects and efforts to help small and medium-sized companies. It should draw on the success of the Olympics and announce definitive plans for a number of major building works, such as the Thames Tideway sewer tunnel, the northern rail hub and a “big new power station”.

“We showed we could do it with the Olympics. What about three or four industrial Olympics?,” Mr Cridland said. “President Kennedy said he’s put a man on the moon in a decade and he did. We can deliver the confidence. What’s holding the economy back is lack of confidence.”

The National Infrastructure Plan was unveiled in November 2011 to lever private money into public projects but progress has been slow. “It’s still in the foothills” Mr Cridland added. “The Government needs to be better at getting things done with a sense of urgency.”

Specifically, the CBI has asked for £200m for road repairs, £150m or a rate rebate for households to insulate their homes through the Green Deal and a £500m export finance loan to ensure small companies can secure orders. It has also requested a 2pc cap on business rates to help retailers, at a cost of £140m, and an increase in the annual tax free investment allowance from £25,000 to £50,000 for 100,000 smaller companies, at a cost of £330m a year.

Capital allowance changes on energy projects and stamp duty exemption for AIM-listed shares are also sought, at a further £200m cost.

“What we’re asking for is quite small beer,” Mr Cridland said. The final bill of around £1.5bn would be comprised of £900m of one-off measures and £600m of recurring costs. He said the giveaway should be funded from last year’s departmental underspend.