CBI: Carbon tax should be frozen

The Confederation of British Industry (CBI) has urged the government to take steps to rebalance the economy and help small businesses grow in its next budget, suggesting the chancellor George Osborne could do more to boost investment and trade in the UK.

Although the country's economy has enjoyed a slight improvement in recent months, concerns still exist that this boost is insufficiently broad-based and may not be able to offer a stable platform for jobs and growth.

Among the suggestions from the CBI was the possibility of freezing the current rate of carbon tax to ensure the UK remains an attractive destination for businesses across the globe.

Furthermore, the organisation called on the government to introduce an energy package which encourages investment in generation and makes life easier for businesses currently struggling with the cost of heating and electricity.

Incentivising longer-term equity investment through tax relief for retail investors, introducing an infrastructure capital allowance to stimulate building and freezing air passenger duties were also suggested by the CBI, which is the largest confederation of employers in the UK.

Director-general John Cridland said the economic recovery can really take hold if the government makes the right moves and allows growth to continue.

"There are encouraging signs that business investment and net trade are on the up and now is the perfect time for the government to get full square behind it, particularly in the case of smaller firms.

"Above all, British businesses must have secure and affordable energy that enables them to compete internationally and keep jobs in the UK," declared Mr Cridland.

He called for additional support for small and medium-sized firms, which are often cited as a potential driver of growth; according to the CBI, putting more investment schemes in place will make it easier for businesses of this kind to access funding.

Nurturing the UK's burgeoning alternative finance market could also play a role in any future economic recovery, concluded the CBI chief.