Business leaders have called on Chancellor Jeremy Hunt to address challenges facing UK companies including labour shortages and wage inflation.

Ahead of the autumn fiscal statement on Thursday, the CBI has today published a set of proposals on how to “get growth going in 2023” and to smooth the “upcoming cliff-edge” in business rates in April.

It highlighted how shortages and difficulties in recruitment were affecting many businesses, including those in the garment sector, which had the effect of “limiting firms’ growth ambitions and fuelling wage inflation”.

The CBI called on the Government to use existing flexibility in the immigration system to help firms access the people and skills they needed and to implement an updated Shortage Occupation List to introduce flexibility to immigrants’ skill level eligibility.

It also urged the Government to commit to developing workplace skills strategies with a focus on upskilling and retraining, including transforming the Apprenticeship Levy into a flexible Skills Challenge Fund.

CBI director-general Tony Danker said: “The Autumn Statement will need to deliver the market stability the new Prime Minister and Chancellor have pledged since taking office. But while I have no problem with tough choices to deliver stability, I do worry that the Government won’t take tough choices to deliver growth.

“All of us need to accept now that with fiscal and monetary policy tightening, we need many more pro-growth policies for our economy if we’re to avoid a decade of no growth.

“The Chancellor has said he will set out a plan for growth on Thursday. But if this is only warm words and aspirations it won’t stop businesses pulling back from investment. It must tackle the real barriers we face right now.

“A desperate lack of workers is inflating wages and stopping firms growing. Our planning rules allow local officials to hamper major projects we need. Our regulatory regime doesn’t do enough to incentivise investment and innovation and it is far more important to change that than partisan efforts to simply repeal EU laws – which won’t make any positive difference to most firms.

“We need to make the UK an attractive place to invest. After the mini-Budget, many global firms are choosing to avoid investing here in 2023. And in the past three weeks I have talked to hundreds of firms who need to decide this month whether to invest for next year or whether to go into hibernation – in fear of predicted recession and no action from policymakers.

“There are real opportunities for growth in Britain next year. These obviously can’t now be achieved from a major stimulus package, but nor can Government believe that warm words alone will give firms confidence.”

www.cbi.org.uk