GEORGE Osborne should consider radical tax cuts and substantial infrastructure investment if the UK’s economy does not improve this year, according to the British Chambers of Commerce.
The business organisation’s pre-Budget submission says that while it backs the principle of reducing spending “a point may come soon where deficit reduction becomes impossible in the absence of sustained growth”.
It also suggests the government should listen to public opinion and redirect some welfare spending towards infrastructure projects in next week’s Budget.
“With our economy teetering on a knife edge, it is not acceptable to protect wasteful current spending at the expense of capital investment and tax cuts that can spur long-term growth,” said director general John Longworth.
However some of the organisation’s harshest words were reserved for the government’s ability to deliver on its past promises. It says that work has yet to begin on many promised road and rail projects, while its members want the government to launch a British Business Bank at the earliest opportunity.
It also calls for 100,000 additional new homes above existing targets to be built by housing associations by 2015.
Other proposals include freezing business rates for three years, tripling the limit on entrepreneurs relief from capital gains tax to £30m, and providing more support for British businesses to export their goods and services overseas.