End deficit earlier, Darling told
The government must balance the budget two years earlier than planned to address concerns about Britain’s AAA credit rating, Alistair Darling has been warned.
The Confederation of British Industry’s (CBI) director-general Richard Lambert has written a letter to the chancellor stating that the only way to resolve worries about Britain’s fiscal credibility is to set out a detailed and credible plan to this end.
“The UK’s deficit, though worryingly large, is still manageable, but the government must act now to set out a convincing, credible pathway for balancing the books,” Mr Lambert said.
“It is critical that this Budget provides credibility and direction on the public finances, and creates the right conditions for businesses to drive economic growth.”
The CBI wants the government’s plan to focus on spending cuts in the public sector rather than increasing taxes or cutting capital spending.
It argues that fixing inefficiencies in supply chains, procurement and workforce management can help raise public sector productivity, claiming savings of £130 billion could be being achieved by 2015/16 as a result.
The government’s pre-election Budget is being viewed as the crucial opportunity for Mr Darling to confront opposition concerns about the lengthy period over which the deficit will be reduced.
The CBI says public sector cuts means the onus will be on the private sector to lead the recovery.
It calls on the government to nurture economic growth by reversing the planned rise in employers’ national insurance contributions, which it calls a “tax on jobs”.
