CUTTING the budget deficit is the biggest step the government can take to boost business confidence and promote economic recovery, the Confederation for British Industry (CBI) said today, arguing that while tweaks to taxes can help firms, the government should restrain from a budget spending splurge.
New measures introduced at the Budget next month should seek to make the UK a more attractive place to invest and do business, said CBI boss John Cridland, rather than providing a fiscal stimulus, which would risk the government’s good reputation.
He called on George Osborne to simplify the controlled foreign companies regime, making it easier for overseas firms to invest in the UK, and for red tape around green taxes to be axed.
The CBI also hit out at Labour’s Ed Balls, claiming any additional spending should be put into infrastructure, where it would boost economic growth, rather than a VAT cut which would boost savings and, in part, be spent on imports.
However, the government did receive some criticism, too – in particular the CBI fears cabinet ministers’ attacks on banks, combined with a focus on reducing immigration, risks making the country look anti-business, which may reduce foreign investment in the UK.