CBI urges Budget action

Mar 24 2009 By nebusiness

WITH the Budget approaching on April 22, the CBI has called on the Chancellor to deliver a confidence-building masterplan shaped around supporting jobs, investment and building competitiveness to
steer the country through the recession.

The organisation has also urged Alistair Darling to come up with a clear and credible strategy to get public finances back under control.

nveiling its Budget submission today (Monday), the CBI is warning that the alarming state of the public finances rules out the option of a further significant fiscal stimulus, which would undermine business and institutional investor confidence in the UK.

Instead, the CBI is proposing a targeted package of measures that will: under-pin confidence; boost competitiveness, employment and investment; improve the skills base; and bring the public finances back on track, with minimum harm to the social and economic fabric of the UK. The package includes:

The reversal of recent decisions adding to business costs and threatening jobs, including delaying the planned rise in employer National Insurance Contributions due in 2011 and smoothing out the volatility of impending rises in business rates.

Making better use of public sector spending by modernising public services to ensure they deliver both quality and value for money.

Pushing ahead with public sector building programmes in schools, hospitals, transport and communications to support construction jobs and position the UK for recovery.

Temporary measures to stimulate demand for low-carbon goods and boost consumer and business spending, including a scrappage scheme for cars, vans and domestic appliances.

Fast-tracking support for the unemployed through Jobcentre Plus and making the new more flexible Train to Gain programme available to all employers.

Reducing the impact of the recession on the current generation of graduates and improving the UK’s skills base, by introducing a temporary subsidy for master’s degree courses in science, technology, engineering and maths.

Sarah Green, regional director, CBI North East, said: "The public finances have been battered by the cost of rising unemployment and lower tax receipts during the recession. With economic activity expected to contract by 3.3% and unemployment set to reach nearly three million this year, the outlook for the public finances is already alarming.

"Against this backdrop, a further significant fiscal stimulus is unaffordable and would lead to businesses and households retrenching in fear of higher tax bills in the future. Instead, the Chancellor needs to let the considerable stimulus already in the pipeline take effect and deliver a clear and credible plan for restoring the public finances to health.

"We need to see measures to instil confidence by supporting as many businesses through the recession and safeguarding as many jobs as possible. That means not adding to the cost of employing people with business tax rises at a time when companies are fighting for survival.

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