Business rates will increase in line with inflation by 10 per cent in April 2023 and the CBI is urging the government in a new report to address rates before manufacturers face a ‘tax cliff edge’ that could damage their businesses and hinder growth across the economy. According to the CBI, tackling business rates would also unlock investment to build new factories, employ more staff, and focus on net zero.
Extending the Industrial Energy Transformation Fund beyond 2025 would help stimulate energy efficiency drives and reduce demand.
Matthew Fell, chief UK policy director at the CBI said the chancellor should use the Autumn Statement to simultaneously stabilise the economy and set out a credible platform for growth.
“The manufacturing sector has a big role to play in the UK’s growth story,” Fell said in a statement. “For every million pounds invested in the sector, the industry produces another £1.5m for the wider economy. To help unlock this investment, the government needs to address the business rates cliff edge. Without serious action ahead of next April, many businesses will struggle with eye-watering rises in their business rates.”
Fell continued: “Another major cost pressure right now is, of course, energy. Improving energy efficiency is an important part of the toolkit for firms to manage these costs in the long run. Extending the Industrial Energy Transformation Fund beyond 2025 to 2030 would give the sector the capital to invest and make their buildings and operations more efficient.”
In its report titled ‘Made in the UK: How manufacturing holds the key to our growth story’, the CBI states: “There are two high-priority areas where manufacturing is uniquely placed to support the government. The first is ensuring that the UK raises its ambitions for how – and where - growth is created from across the economy. The second area is focused on the biggest growth opportunity of them all – achieving net zero by 2050 where UK manufacturing has the innovation and investment potential to be a trading powerhouse in a post-Brexit environment.”
Brian Holliday, CBI Manufacturing council chair said: “It is great to see the CBI backing UK manufacturing. The sector is key to the growth and resilience of the economy as a whole and crucially, the development of green technologies. If the country is to avoid the worst effects of recession and reduce carbon emissions, manufacturers need confidence to invest.
“Government can help in the short term, enabling finance to flow into projects through freezing business rates whilst extending targeted policy instruments such as the Industrial Energy Transformation Fund.”
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