The head of the Confederation of British Industry (CBI) said urgent action was needed from the chancellor on Thursday to boost the economy, including “tough policy choices” to allow more overseas workers into Britain as employers struggle with desperate staff shortages . With Hunt expected to offer fine fodder for businesses and individuals in an autumn statement focused on balancing the books through tax rises and spending cuts, the CBI said “no-cost” options needed to be taken to boost economic growth, otherwise businesses will “hibernate” this winter. After the economic storm caused by Kwasi Kwarteng’s disastrous mini-budget, Tony Danker, director-general of the CBI, said its members had agreed to “tough fiscal choices” on spending and taxes. But CBI members feared the government was unwilling to confront Tory MPs on issues such as immigration and planning reform, which divide the Tory party but could support the economy. “With the tightening of fiscal and monetary policy, we need much more pro-growth policies for our economy if we are to avoid a decade without growth,” Danker said. The chancellor promised to draw up a plan for growth on Thursday, but said he needed to “address the real barriers we face at the moment”. Ahead of what is expected to be an austerity budget, the lobby group which speaks for 190,000 companies nationally, said a failure to tackle labor shortages and encourage business investment would be extremely damaging to the economy in the short and long term. “Not matching action on spending and taxes with measures to address labor shortages and productivity is likely to be detrimental in the short and long term,” Danker said. “A desperate labor shortage is driving up wages and stalling business growth.” “Our planning rules allow local officials to block the big projects we need. Our regulatory regime does not do enough to incentivize investment and innovation. It is far more important to change this than partisan efforts to simply repeal EU laws that will make no positive difference to most companies.” Last week, Simon Wolfson, the chief executive of clothing and home goods retailer Next, urged the government to make it easier for foreign workers to enter the UK, saying this was “not the Brexit I wanted”. The Conservative peer and Brexit supporter said the government was blocking much-needed workers from entering the UK, even as companies desperately sought labour. Company bosses warn that sectors such as hospitality, construction and manufacturing are experiencing the worst staff shortages. The CBI said the government’s occupation shortage list, which offers easier work visas for overseas workers in certain jobs, could be expanded. Routes for student and postgraduate visas, as well as visas linked to specific economic projects, could also be added. It comes amid signs of a collapse in business confidence following the turmoil caused by the Truss mini-budget. Boardroom confidence fell in October to its lowest level in at least 13 years, according to a poll of 1,400 British companies by Accenture and S&P Global. Industry leaders have warned that debilitating energy costs are a growing concern ahead of a “cliff” in support next spring when the government’s energy bill relief program is set to expire on March 31. Subscribe to Business Today Get ready for the business day – we’ll point you to all the business news and analysis you need every morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. The British Chambers of Commerce (BCC) said half of small businesses would struggle to pay their bills when support ends, and called on the government to announce new measures to help companies with rising costs. Shevaun Haviland, the BCC’s chief executive, described it as a worrying number, but said it was “even more worrying” that 4% said they would not be able to pay at all without the subsidy. With more than 5.5 million small and medium-sized enterprises (SMEs) across the UK, if this was repeated nationally, more than 220,000 SMEs would be at risk, he said. “There is a cliff edge and companies will struggle to see beyond it.” The CBI said an autumn statement on Thursday that failed to give enough encouragement to companies to invest in capital projects and new innovation could risk “another decade” of flattening economic performance, making a new round of spending cuts and tax rises more likely. . Official data last week showed Britain’s economy took its first steps into a potentially long recession in the three months to September, with inflation at its highest level since 1982. In the turmoil that followed the mini-budget, Liz Truss reversed her plan to cancel the corporation tax rise next spring. The planned rise from 19% to 25% will now continue from April. But the CBI said the damage to sentiment caused by the short-lived experiment with “Trussonomics” meant many global companies were choosing not to invest in the UK next year, while warning Hunt needed to change his mind. “A lot of businesses are doing their budgets for 2023 right now,” Danker said. “They see growth ahead and want to invest, but are afraid that all the messages from policymakers are warning them not to.”
