20 September 2010
Business leaders have called on the government to safeguard infrastructure from budget cuts in a submission to the forthcoming Spending Review.
The CBI today says the Treasury should prioritise areas that stimulate economic growth by investing in capital and transport projects in next month’s spending round. The business lobby group also calls for further savings to be found in the welfare budget and through reforming public sector pensions.
In the June Budget, the government announced it would make cuts of £32bn a year until 2014/15.
CBI deputy director general John Cridland welcomed the coalition’s decision to limit public spending instead of introducing greater tax rises.
He said: ‘Cutting spending means tough choice... The government must improve the efficiency of public services and focus the limited public money available on areas that do most to galvanise growth.’
Public sector capital investment, which has gradually been cut since the 2008 Pre-Budget Report, should be returned to 2.25% of gross domestic product as soon as possible, according to the CBI submission.
The government must also press ahead with major transport projects such as the London Crossrail scheme and upgrading of the London Underground to help boost domestic and international trade.
Meanwhile savings should be generated by targeting welfare payments more carefully through greater means-testing and giving tighter scrutiny to public sector pensions.
