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07/11/2005
Chancellor urged to cut pubic spending
Employers’ organisation the CBI has urged Chancellor Gordon Brown to cut back on public spending plans.
The CBI said that the government needed to tackle a £10 billion structural deficit in public finances within the next two years. In order to bring public sector finances back under control, the CBI said, the growth of total spending should be constrained over the next two years to £51.4 billion – in line with GDP growth and still ahead of inflation – rather than the £61.4 billion planned.
The Chancellor is due to publish his forecast in the Pre Budget Report later this month.
CBI Deputy Director-General John Cridland said: “Whilst the Chancellor can shift the fiscal goalposts and delay the Comprehensive Spending Review, tackling the structural deficit can only be deferred, not ducked forever.
“The prudent decision would be to reconsider the government’s spending plans for the next two years and get a grip on the deficit now.”
Mr Cridland also warned that further tax rises would be “extremely damaging”, because economic growth is slowing down.
The CBI called for a cut in the general business tax burden before 2010, saying that UK companies and investors had paid more than £50 billion extra as a result of Budget policy decisions.
The employer's body also called on the government to continue with the reform of corporation tax and strongly criticised tax measures being introduced under an ‘anti-avoidance’ banner by the Treasury.
Recommending that savings could be made by holding back public sector pay rises, cutting absenteeism and tackling fraud and error in the benefits system, the CBI said that spending on education and skills, transport, science and technology and innovation and support services for trade and businesses were “vital for the economy’s long-term prospects” and should be protected.
(KMcA/SP)
The CBI said that the government needed to tackle a £10 billion structural deficit in public finances within the next two years. In order to bring public sector finances back under control, the CBI said, the growth of total spending should be constrained over the next two years to £51.4 billion – in line with GDP growth and still ahead of inflation – rather than the £61.4 billion planned.
The Chancellor is due to publish his forecast in the Pre Budget Report later this month.
CBI Deputy Director-General John Cridland said: “Whilst the Chancellor can shift the fiscal goalposts and delay the Comprehensive Spending Review, tackling the structural deficit can only be deferred, not ducked forever.
“The prudent decision would be to reconsider the government’s spending plans for the next two years and get a grip on the deficit now.”
Mr Cridland also warned that further tax rises would be “extremely damaging”, because economic growth is slowing down.
The CBI called for a cut in the general business tax burden before 2010, saying that UK companies and investors had paid more than £50 billion extra as a result of Budget policy decisions.
The employer's body also called on the government to continue with the reform of corporation tax and strongly criticised tax measures being introduced under an ‘anti-avoidance’ banner by the Treasury.
Recommending that savings could be made by holding back public sector pay rises, cutting absenteeism and tackling fraud and error in the benefits system, the CBI said that spending on education and skills, transport, science and technology and innovation and support services for trade and businesses were “vital for the economy’s long-term prospects” and should be protected.
(KMcA/SP)
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