Tackle barriers to growth to improve economic outlook in 2023: Beckie Hart

As energy bills are rocketing and the cost-of-living crisis is deepening, it’s clear that the year ahead will not be easy.

At the CBI we have reason to be optimistic that there are ways we can ease the pressures facing business today.

There is still a lot of untapped growth potential - the important question now is how to get the economy growing again, even in times of profound difficulty.

Amidst external uncertainty, the CBI’s priorities for the twelve months ahead are crystal clear.

It is crucial we ensure that our economic outlook improves, not worsens beyond the predicted contraction of 0.4 per cent, and gets back to growth.

In 2023, we will continue to challenge some of the barriers holding back firms, because there are plenty of steps the Government can take to support business - even in times of tight monetary and fiscal policy.

Whilst we are expecting clarity on the Government’s plans for energy bill support beyond March this week, it is clear that whatever the level of support offered, it won’t be enough to mitigate against the continued high energy prices which are weighing down firms’ desire to build on their ambitions, including investment intentions.

It will however help companies to remain resilient and in some cases avoid collapse.

We also need to solve our labour shortages. The increase of economic inactivity, in part resulting from the Covid-19 pandemic, has had a considerable negative effect on workforce availability.

We don’t have enough people for existing vacancies, and many of those seeking employment lack the skills to meet current demand.

That’s why we will continue to push for greater flexibility in the Apprenticeship Levy, enabling firms to get the training they need.

Building on the skills of our workforce will allow us to bridge a lot of the gaps we’re currently facing.

But in the short term we also need to look at economic migration.

We can tackle some of our existing shortages through fixed-term visas and an updated shortages occupation list in those areas where we aren’t going to get enough people and skills at home in the near future.

And green growth has to return to the top of the agenda. Decarbonisation is one of the areas offering the biggest prizes for firms especially in the Yorkshire and Humber region. But we need Government to create an environment where firms here and beyond are empowered to accelerate their energy transition, and to pursue major green investment projects.

Growth is indisputably the way forward. It’s our chance to improve our economic outlook, public services and living standards – and we can’t lose that focus.

We achieve the best outcomes when firms and Government are aligned on the important questions. And we’re positive that this year, like many years before, the resilience of British business will help to carry us through hard times.

Beckie Hart is CBI regional director for Yorkshire and Humber