CPA Bulletin

www.cpa.uk.net CPA Bulletin > November 2022 29 POLICY: 2 implemented to boost business investment in the UK. The main parts of the CPA’s response were: • Reforms should include temporarily keeping the Super Deduction Allowance (SDA) until the economy improves sufficiently • Any potential successor to the SDA must include the construction plant-hire industry. This is vital if the industry is to invest in new, cleaner, greener technology that improve air quality and lowers emissions • The annual investment allowance (AIA) should be set at a permanent level of £1.25m, moving away from its current temporary limit of £1m • Future capital reliefs should be flexible and adjusted in line with rising inflation • Any reforms to the UK’s capital allowances and reliefs should reflect the business cycle and move away from short term extensions to existing measures In addition to these policies, we need consistency in the education and skills agenda, with the government committed to allowing policy measures to take effect. Again, these are long-term in nature, with the present government unlikely to reap the political benefits from any measures they implement. If they were to reform skills and education policy (long-standing business dissatisfaction with the apprenticeship levy remains), this must happen in conjunction with business, identifying issues and areas of concern, with policy measures that are designed to be long-lasting and effective. The Truss government was looking at changing the rules on the skill level requirements for immigration, with the Migration Advisory Committee allegedly looking at construction as one sector that could benefit. While a welcome move, in the post-Brexit economy, the focus in the long- term, must be on training and upskilling our workforce. The UK economy towards the end of 2022 and into 2023 seems set for a period of uncertainty and turbulence. Although the recent statement by the Chancellor called for all government departments to look at efficiency savings (code for cuts), it is important the government does not lose sight of what matters and how it can be achieved. For example, cutting the infrastructure budget might be a short- term saving, but would do nothing to build economic growth and would ultimately mean projects and schemes that need development, will cost more in the long run. Long term economic growth is paramount in the post-Brexit economy, but it can only be achieved in a sensible sustained way and in a manner that works for and with business. The UK’s reputation as a destination for stable government has taken a battering in recent months, prolonging uncertainty in the immediate short-term health of the economy. As part of the process of restoring the UK’s growth prospects, Prime Minister Sunak must finally set out policies that address the UK’s issues with productivity and business investment - and make sure they survive first contact with political reality. This can only be achieved if the government pursues stability, patience, and consistency.