Business groups back Osborne stance
BUSINESS leaders have welcomed the stance taken by George Osborne in his first speech to the Conservative Party Conference as Chancellor.
However, most were of the opinion all it had done was set down a marker for the cutbacks expected as a result of the Comprehensive Spending Review later this month.
David Frost, chief executive of the British Chambers of Commerce, speaking at a fringe meeting in Birmingham immediately after the speech, said: “I think he set the right tone but the focus on the economy now needs to shift away from public sector cutbacks and look instead on how business is to lead the recovery.”
Mr Frost told the meeting – ‘The Business Debate: Spending cuts and policy changes – will the Government’s programme secure economic recovery?’, that if the UK was to emerge triumphant from the recession then business would need to be in the vanguard.
“The national debate has to change. We have to shift the focus from cutbacks and put our collective energies into growing the economy,” he told the meeting.
Mr Frost said the focus now needed to be on three fields: encouraging new entrepreneurs; developing the national infrastructure and boosting exports.
He also delivered a strong message to the Government saying that it needed to reduce the red tape burden on companies, especially SMEs.
The new discrimination legislation was unwelcome and he said further employment legislation and increases to the minimum wage were an unwanted burden at what was, an already difficult time for many firms.
“Quite frankly this is a load of nonsense. If you are running a business then you don’t need this. When the Government talks about deregulation then it has to match its words,” he said.
Richard Lambert, CBI Director-General, said the Chancellor had paved the way for public sector cutbacks.
“His emphasis on the need for radical public sector reform was welcome, as was his recognition that investment in education, innovation and transport infrastructure must be a priority.
“The UK can’t just cut its way back to economic health. That will have to be built on private sector growth, business investment and trade,” he said.
Graeme Leach, chief economist at the Institute of Directors, praised Mr Osborne’s tough action, adding: “The economy needs fast and deep deficit reduction and that’s exactly what the Chancellor is delivering.
“Equally important to the scale of deficit reduction is the way it is done. Here again the Chancellor is choosing the right route, by concentrating overwhelmingly on closing the fiscal gap with lower spending instead of higher taxation.”
