BRITAIN’S huge deficit should be tackled with £4 in spending cuts for every £1 in tax hikes, the CBI said.
In a letter to Chancellor George Osborne yesterday ahead of the emergency Budget on 22 June, the CBI warned that the public finances should be repaired without damaging growth prospects.
It called for a shake-up of public services provision to save money through moves such as job cuts and sharing back office functions.
CBI deputy director-general John Cridland said: “A radical re-engineering of public services is a must if damaging tax rises are to be avoided. Only an effective cost reduction strategy can safeguard future growth.”
The CBI has “major concerns” over proposals to hike capital gains tax to similar levels as income tax and wants a broad definition of business assets to prevent deterring start-ups.
It also wants tax credits for research and development protected as well as capital spending levels to be restored as soon as possible.
“The UK’s future economic prospects depend on the ability of firms across the country to create new jobs and win orders. Increasing taxes makes this more difficult,” Cridland warned.