Rishi Sunak’s government is ‘backtracking’ on building a greener economy and has no growth plan to soften the blow of the recession, the head of the UK’s top business lobby group says United.
Tony Danker, chief executive of the Confederation of British Industry (CBI), said the Prime Minister’s lack of ambition for the low-carbon economy left business leaders “confused and disappointed” after the progress made under Boris Johnson.
Arguing that the government lost its ‘biggest champion’ in the cabinet for green economic growth when Johnson left No 10, Danker said: ‘In raw terms, most businesses think the government is backing down on the green, having progressed over the past five years.”
He said it was causing “real and widespread concern” on corporate boardrooms across the country, as bosses believe the low-carbon economy of the future is an area where the Big Britain could become a world leader.
Warning that a ‘competitive price’ was at risk, Danker said companies wanted more government action on carbon capture, sustainable finance in the City of London, onshore wind and investment in renewable energies. “The government is strangely silent and reluctant for all the levers of green growth.
Danker said the failure to encourage businesses to invest in green projects and other productivity improvement programs was weighing on the outlook for the UK economy.
Publishing a pessimistic assessment in its latest economic forecast, the CBI said Britain in 2023 would continue to be plagued by high inflation, weak economic growth, weak business investment and chronic labor shortages.
Reflecting higher taxes, a squeeze on household incomes and weaker growth prospects, he said business investment at the end of 2024 was on track to remain 9% below the December 2019 level. , before the Covid pandemic hit.
Danker said, “The country has no plan for growth. There are plenty of worrying signs of recession and headwinds. What we lack is a sense of reason to believe in investor confidence or a market framework for growth, coming from government.
Jeremy Hunt used his autumn speech last month to argue that Britain could take advantage of “Brexit freedoms” to cut regulations in five key growth sectors: digital technology, life sciences, green industries, financial services and advanced manufacturing.
However, the Chancellor also confirmed that the headline corporate tax rate would increase by six percentage points from 19% to 25% from April, and that the government’s investment support program of “super deduction” would end.
In a bid to restore investor confidence in government after Liz Truss’ disastrous mini budget, Hunt suggested higher taxes should be part of the plan to show Britain can pay, while prioritizing financial stability and the reduction of inflation as prerequisites for economic growth.
The CBI chief said business leaders understood the government’s aims, but he warned there was a danger companies would walk away from investing in Britain without a more robust growth plan from the part of the government.
“We shouldn’t try Liz Truss and Kwasi Kwarteng’s growth formula of cutting everyone’s taxes and boosting consumption. But we should try to stimulate business investment.
The CBI said chronic labor shortages required a more flexible immigration system, as well as more investment in education and training. He called for the removal of the de facto ban on onshore wind and for the government to offer companies tax relief on productivity-boosting investments.
This comes as the economy is expected to have already entered recession in the third quarter of this year, when GDP fell by 0.2%. The business group said it expected the recession to last until the end of 2023, with high levels of inflation, as well as a decline in business investment from the middle of the year. year and lower consumer spending year on year.
Danker said: “It is important that Britain finally tackles business investment. I think Rishi Sunak understands that. Companies recognize this. And yet, we have no strategy for that.
