UK employers urge Hammond to boost investment, infrastructure

LONDON (Reuters) - Chancellor Philip Hammond should encourage businesses to invest and spend more on infrastructure when he delivers his first budget statement since Britain's vote to leave the European Union, an employers group said. The Confederation of British Industry urged Hammond to boost public investment to 2 percent of economic output, or an increase of around 6 billion pounds a year, when he delivers his Autumn Statement on Nov. 23. "Amid economic uncertainty, it's important that the government does what it can to incentivise businesses to invest today, rather than postpone until tomorrow," CBI Director-General Carolyn Fairbairn said. Businesses should be allowed to exempt new plant and machinery investments from their business rates bills as a way to offset the expected drag from Brexit on investment and the likely hit to productivity, the CBI said. It also asked Hammond to ensure fast delivery of 425 billion pounds' worth of planned infrastructure investments. "With interest rates at rock bottom, now is the time for the UK to put serious effort into improving our creaking infrastructure," Fairbairn said. Hammond has signalled he might announce modest infrastructure investments to help the economy cope with the Brexit-related uncertainty, but he has also stressed that his room for manoeuvre is limited by Britain's weak public finances. As part of its Autumn Statement wish-list, the CBI asked Hammond to double funding for national innovation agency Innovate UK and increase tax credits for research and development by 50 percent. The CBI represents 190,000 businesses across Britain. On Tuesday it greeted government's approval of a new runway at Heathrow Airport as "an enormous relief to firms in every corner of the country". (Reporting by Helen Reid; Editing by William Schomberg)