Economic growth should boost NHS not business tax increases

The head of the CBI has issued a stern reminder to UK Chancellor Gordon Brown that boosting economic growth can produce the long-term funding needed to improve public services.

Speaking to business leaders on Monday April 15, CBI chief Digby Jones warned that raising business taxes would be "a bitter blow" for firms struggling out of the economic slowdown. Instead, rejuvenating the business sector through tax incentives would cement the future of cash-strapped services.

"What the business sector needs is tax help, not tax increases. Profitability has fallen sharply over the last few years. The chancellor cannot afford to ignore that if he wants stable long-term finances for our struggling NHS," he said.

Mr Jones also pointed out that raising the level of GDP by just 0.5 per cent would put at least £2 billion extra a year into the Treasury coffers. This could pay for an NHS spending increase of four per cent per year on top of current commitments.

He said: "Business shares the desire for better public services. But in the long run it is a successful economy and successful businesses that will solve NHS funding problems. In the end, that is the only way to get the money to deliver improvements.

"Increasing business taxes would be a bitter blow. Not only would it harm companies that have fought so hard to survive a painful global slowdown. It would hinder firms that could create the growth needed to help deliver the government's public sector promises."

Alongside the budget, the chancellor is expected to publish a report on healthcare by Derek Wanless, former Chief Executive of National Westminster Bank. The report will assess healthcare costs in 2020 and consider the growth in spending needed to meet them.

Mr Jones continued: “CBI research suggests that sickness absence from work costs the UK some £23 billion a year, due in part to our inadequate healthcare system.

"But increased spending alone is not the answer. If there is to be more money for public services, it must be linked to significant reform. Ministers must show they have the mettle to push through the change they know is needed. Business is just like the public. We do not want more of the same. We want and deserve something that is better.” (AMcE)