Business leaders are pushing the government to develop a plan that will balance the public finances by the year 2016 when is two years earlier than originally planned.
The CBI believes that this target date could be reached if spending is lowered overall and the public sector underwent reform. The organization claims that the government has used tax rises to try and reduce the public finance deficit which has done more damage than goof and wants the plans for an increase in employers’ National Insurance contributions to be abolished.
According to the CBI, going ahead with the increase in contributions would have a taxing effect on employment levels and is ‘ill-advised.’ It is also pushing for Chancellor Alistair Darling to make use of his last Budget before the general election in order to detail Whitehall department spending plans so that a higher level of economic stability is reached.
Director of the CBI, Richard Lambert, wrote a letter to Darling that suggested the UK fiscal credibility and economic growth fostering should be the primary concerns of the soon to be announced budget.
Lambert wrote that the Government needs to start laying a pathway that is credible towards balancing the deficit because while investors abroad are worried about the debt, they will give the UK a break up until the election takes place.
Other suggestions made by the CBI include one that if public money were spent in a better fashion over £130bn could be saved every year.