‘Stick with cuts plan’, CBI tells Osborne

18 Nov 13
Business leaders have urged Chancellor George Osborne to stick to his deficit reduction strategy despite improvements in the economy, warning that the job of cutting spending is ‘only half done’.

By Richard Johnstone | 18 November 2013

Business leaders have urged Chancellor George Osborne to stick to his deficit reduction strategy despite improvements in the economy, warning that the job of cutting spending is ‘only half done’.

Publishing the CBI’s submission to the Treasury ahead of the Autumn Statement on December 5, director general John Cridland said the government ‘must not forget the job on deficit reduction is only half done and needs finishing’. This is despite a host of improving economic forecasts for the economy over the next year.

Deficit reduction should ‘go hand in hand with business investment to create jobs, raise living standards and drive the recovery,’ Cridland added.

Among its recommendations, the CBI called on the government to commit to an overhaul of business rates, which are ‘complex and outmoded’ and act as a barrier to investment.

For example, the timing of revaluation cycles for rates means payments are often out of kilter with rental values, the group said, and must be changed.

Osborne should commit to a full review of the system, capping annual increases at 2% while this is undertaken. The government should also introduce a one-year rate relief as an incentive for businesses to move into vacant high street properties. Half of business rate growth has been localised to councils as part of the coalition’s local government finance reforms.

Cridland added: ‘At the heart of our realistic package of measures for the chancellor is an overhaul of the business rates system, which will boost the high street, manufacturers and factories. We want to ensure windows are opened up, not boarded up.’

In its submission, the CBI also called for further action to boost supply of housing by accelerating the release of land and taking action to quicken the planning process.

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