CBI warns about economic recovery

LONDON (SHARECAST) – Britain’s leading business group, the CBI, has warned the government that it needs to do more to boost the attractiveness of the UK to overseas investors or risk its recovery plan failing.

“Having acted fast to tackle the deficit, the Government must now focus on how to attract more investment to the UK, if we are to create new jobs and grow the economy,” Richard Lambert, CBI Director-General, said:

“The UK is still perceived to be an attractive place to invest compared to many other countries, but is seen to have lost ground in recent years, and as lagging behind the US, China and India. The UK needs to improve in the areas that really matter, otherwise other nations will steal a march on the UK as a place to invest,” he added.

A survey of 120 business leaders interviewed by the CBI found it was performing “relatively poorly” in the four most important criteria, with its positon eroded in key areas such as taxation and the nature and level of its regulation.

Comments from the survey included “Tax levels are very high and low return”, there is “significantly greater support in other countries in new investment”, and that “legislation adds significant cost in the UK compared to Western Europe”.

Prime minister David Cameron speaks to the CBI’s annual conference today and will spell out the government’s plans to get the economy growing and also to attract investment into the UK.

Lambert added that generally there is support among businesses for the deficit reduction programme.

“The Coalition’s efforts to improve the general business climate are viewed favourably, but there is much to do to improve the UK’s competitiveness as a destination for investment. The stakes are high, but if the UK raises its game, the prize we reap in jobs and opportunities will be considerable,” he said.