British businesses call on next government to reduce deficit

Monday 15th February 2010

British businesses have told the government it must reduce the country's deficit as well as recommending the rise in National Insurance contributions (NICs) should be scrapped.

The British Chambers of Commerce (BCC) found in its latest monthly business survey that 41 per cent of companies that responded believe that the next government should make reducing the budget deficit its number one priority.

The UK's budget deficit currently stands at £178 billion and has been a hot topic for the warring political parties in the run-up to this summer's general election.

The BCC found that 22 per cent of firms said that "slashing the red tape burden" should be the government's top priority, while 13 per cent argued that the focus should be on making the UK's tax system more competitive. A rise in NICs was seen by businesses to be the most damaging tax rise the government could impose on them.

From its survey, the BCC said the planned NICs hike should be scrapped, and substituted by a VAT rise coupled with targeted spending cuts, which would have much the same affect on the Treasury.

David Frost, director general of the BCC, said: "The message from business is clear. After an election, we have to get a serious grip on the country’s public finances and escalating debt. Cutting the deficit means making tough decisions on spending, like freezing the public sector wage bill and reforming public sector pensions.

"So let's scrap the NICs 'tax on jobs' and offset it with a one per cent VAT increase. It’s a tough call, but we have to be realistic about repairing the public finances, and promoting recovery."

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