CBI’s 100-day deadline for Apprenticeship Levy Reform

The CBI’s Business Manifesto, shaped by input from over 400 business leaders and 70 Trade Associations, maps out the steps the next Government can take to redefine the UK’s growth trajectory and place the UK firmly on a sustainable path.  

As public spending is squeezed and monetary policy is likely to remain tight, growth across the next Parliament will come squarely off the back of the private sector. With capital in no short supply, and the UK in a global race for investment, the defining challenge for the new Government’s first 100 days will be to develop a credible plan to crowd in private sector investment and deliver sustainable growth. 

Key recommendations include: 

Revitalise the investor pitch for ‘Brand Britain’: 

• Launch a cutting-edge trade and investment strategy – increasing UK exports, securing imports, and growing investment, to maximise the UK’s competitive advantage, growth and productivity, boosting employment  
• Deliver a Net Zero Investment Plan – secure the UK’s standing as world-leader on green growth, fostering investment opportunities so firms want to invest and grow in the UK. Success can create jobs, provide greater energy security and efficiency, lower energy costs, increase tax receipts, fund public services and help avert a climate emergency 
• Unlock the power of UK regions – Aligning UK industrial and trade strategy with the transformative role of UK Mayors, via a new industry-partnered Mayoral Economic Compact launching on 17 July 2024   

Build momentum within the first 100 days on the ‘big three’ enablers for investment: 

• Build a tax environment that drives investment – develop a long-term UK Business Tax Roadmap to deliver a simplified and digitised business tax system with international competitiveness at its heart 
• Transform the planning system – speed up decisions and cut bureaucracy with a UK-wide Planning for Growth Strategy, and prioritise grid connections 
• Boost the labour market & productivity – by expanding tax-free occupational health support to incentivise business investment in early workforce health interventions, helping prevent employees leaving the labour market, and extending the Made Smarter programme to all sectors, giving firms the support and funding they need to grow   

Rain Newton-Smith, CBI CEO, said: 

“The UK economy has spent the last five years buffeted by a series of ‘one-off’ shocks – from the aftermath of Brexit, to Covid, to global conflict and the subsequent energy crisis. As a result, our economy has understandably focused more on shock absorption than on boosting growth.  

“Firms can now see some bright spots emerging in the UK economy. But the challenges are persistent: sluggish productivity growth, underperforming business investment compared to our international counterparts, and ongoing labour and skills shortages.  

“A new Government of whatever colour provides an opportunity to shift gear and prioritise the long-term decisions that can deliver a decade of sustainable growth.  

“Top of the in-tray should be sharpening the investor pitch for ‘Brand Britain’ – ensuring we are at the very top of the league table when it comes to investment. At the same time, a focus on building momentum behind the ‘big three’ enablers across tax, planning and the labour market within the first 100 days can give firms a clear flightpath for growth. 

“We want to see a new Government deliver a bold pitch to investors across the globe, restore the UK’s competitiveness, and double down on our climate commitments and opportunities.” 

Sector Responce

Commenting on the CBI manifesto launch today, Kate Shoesmith, REC Deputy Chief Executive, said:

“The next government must act quickly to smooth out kinks in the labour pipeline or risk a £39 billion cost to the economy per year because of labour and skills shortages – just short of two whole Elizabeth Lines. Success will require politicians and policymakers to up their understanding of today’s tight labour market and build the solutions to it in a more modern way.”

The CBI Manifesto calls for action within 100 days on key labour market policies: reform of the Apprenticeship Levy; a cross-departmental strategy to tackle labour shortages; and announce a new remit for the Low Pay Commission.

Kate Shoesmith said:

“We strongly support the next government aiming to reform the Apprenticeship Levy within the first 100 days. This should include reform that allows levy funding for high-quality, modular training to enable more people, including temporary workers to train and fill vacancies. Today, levy funds are only available to those who have the same employer for at least one year, which is the time it takes to complete an apprenticeship. But this means we are not making the most of British talent, because by our calculations, out of the one million temporary workers on assignment in the UK every day, around 960,000 workers are ineligible for levy funding.

“Asking the Cabinet office to lead cross-departmental strategy to tackle labour shortages – and immediately – gives us a chance of a long-term plan for how the UK will put people planning at the heart of its growth strategy. But the next government must commit to keep this approach in place over many years. After all, the most successful UK labour market changes of past few decades, such as National Living Wage and pensions autoenrollment, have been delivered this way.”

Kate Shoesmith added:

“A look at the Low Pay Commission’s remit is worthwhile to ensure decisions around minimum wages are entirely evidence-based, rather than politically driven. Wage rates must support enhanced opportunities, protections for the most vulnerable workers, as well as sustainability for all businesses.”