How does government policy affect your business? According to the director general of the Confederation of British Industry (CBI), the current policy framework is placing a “cumulative burden” on businesses which could threaten economic growth.
CBI director general Carolyn Fairbairn cited policies including the National Living Wage, apprenticeship levy and pension auto-enrolment as placing “a number of strains” on UK business. Fairbairn also criticised “wrong-headed” visa policies.
The National Living Wage, a higher rate of minimum wage, is set to rise to £9 per hour by 2020. Business leaders have said it will increase pressure, particularly on small businesses and low-pay sectors such as hospitality.
Business leaders are also concerned about the government’s apprenticeship plans, which will be funded by a levy on companies. The number of apprenticeships is forecast to rise to three million under the scheme, with industry covering the cost of training.
Pension auto-enrolment is a rolling process. Larger employers are already required to be compliant, while smaller businesses are required to set up pension schemes by 2018 according to a phased timetable.
Fairbairn said: “Overall, UK policymakers need to deliver regulatory stability and predictability. Businesses struggle to invest when the rules repeatedly change – as we have seen in the energy sector where policy shifts have chilled investment.”
The CBI director general also said politicians should “reform the UK’s wrong-headed visa policies that are keeping global talent from our growing firms and global students from our world class universities.”
Fairbairn also cited the “abject failure” of the government to make a decision over airport expansion in the South East as an example of policy risking economic development, saying: “Good business needs good infrastructure – yet the UK currently ranks 24th in the world, according to the World Economic Forum. We have fallen badly behind over many decades – we must catch up and then pull away.”
Are government policies risking the future growth of your business?
‘If you are looking to invest in the growth of your business, consider a flexible finance solution from Wesleyan Bank.