£29bn in extra costs from NLW and apprenticeship levy will damage SMEs and economy, CBI warns

The Confederation of British Industry (CBI) has estimated that SMEs face an additional bill of approximately £29 billion over the course of our current Parliament.

The extra costs boil down to policy changes including the National Living Wage (NLW) and apprenticeship levy which, by 2020/21, are collectively forecast to cost businesses around £9 billion per year.

Combined with current issues surrounding business rates, the CBI believes that the ability of the sector to drive growth in the economy will be significantly reduced.

“The UK needs to be able to grow its way out of the deficit, but the danger of this rising policy burden is that it holds back businesses, particularly smaller firms,” said CBI director general, Carolyn Fairbairn.

Ms Fairbairn argued that SMEs should be lobbying for much more Government support in the coming Budget. Businesses “will want to see the Government supporting investment through the capital allowance system and equipping our world-class innovators with the tools they need to compete globally,” she said.

The business group also proposed a new independent national exports commission, in hopes of improving Britain’s overseas trade.

“We’re calling on the Government to refrain from layering further costs on firms, and instead to take a number of steps to support investment and propel innovation,” said CBI director of economics, Rain Newton-Smith.