Joint call by TUC and CBI for
budget to improve productivity
4 March 2001 - The Confederation of British Industry and the Trades Union Congress were asked by Chancellor
Gordon Brown to work together on budget proposals. CBI/TUC recommendations include:
- Extendsion of tax credits for research and development, andadditionally offering more generous capital
allowances for small and medium-size firms.
- Improving the funding of regional development and conducting an urgent investigation into the
causes of industrial under-investment.
- Widening eligibility for discounts on the government's energy tax, the Climate Change
Levy, to include more firms.
- Releasing adequate funds to allow all adults to receive publicly-funded education or training up to
the equivalent of GCSE.
Official statistics show that the United Kingdom is not closing the long-standing productivity gap with key
competitor countries such as the USA, France and Germany. According to John Monks, TUC General
'We are ready to do all we can to rise to the productivity challenge set out by the
Chancellor. By working in partnership with the CBI and others, we have a golden opportunity to
secure a lasting improvement in our productivity record.
Digby Jones, CBI Director-General stated:
'Our first ever joint Budget Submission sets out the immediate priorities. Over the next six
months we will be working together to identify further practical steps for action by employers,
trade unions and government. It is time to stop talking about the productivity gap and start
doing something about it. Nothing is going to change overnight because closing the gap is a
long-term business. But these are a realistic set of proposals that would be an important step
in the right direction.
'There are many other areas where the CBI is looking to the Chancellor to improve the
climate for doing business in the UK. But where there is common ground with the TUC, we are
pleased to make our joint voice heard.'
TUC/CBI Joint Budget Recommendations
The TUC and the CBI agree that the following measures should be introduced in the March 2001
Budget as the first step in supporting the government's productivity initiative.
- We recommend the introduction of an incremental R&D tax credit which gives
clear recognition to development as well as the traditional areas of research - to be available
to companies above the SME threshold.
- We recommend that plant and machinery capital allowances for SMEs are made more
generous, and a broader definition adopted for the temporary 100% first year allowance for
- We recommend the strengthening of the industrial support and regional development
budgets for the DTI, Scottish Parliament and Welsh Assembly, particularly for Regional
Development Agencies and the Partnership Fund
- In order to support the joint work programme of the TUC and CBI on productivity,
we recommend the Government undertake an urgent investigation into the underlying causes of
industrial under-investment and possible solutions, including additional investment incentives.
On training, we recommend:
- Sufficient additional funding to allow the implementation of the Skills Task Force
recommendation that all adults who do not hold a qualification at level two be entitled to
public funding to achieve this level:
- An incentive for small firms to help them achieve the Investors in People standard.
- We believe improvements to the Climate Change Levy (CCL), particularly on eligibility
criteria for discounts, should be made before implementation in April 2001. Failing that, we
recommend the government commits itself actively and immediately to reviewing the operation
of the CCL in consultation with the social partners in order that changes can be made at the
earliest opportunity in the budgetary process.