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Business group calls for welfare cut to help boost economy

PUBLISHED: 11:36 05 June 2013 | UPDATED: 11:53 05 June 2013

Caroline Williams, chief executive of Norfolk Chamber

Caroline Williams, chief executive of Norfolk Chamber

Archant

Businesses want to see social security and foreign aid budgets slashed to pay for a major programme of investment to boost Britain's ailing economy, according to a survey.

A survey by the British Chambers of Commerce (BCC) suggests firms favour a massive reallocation of resources away from the Government’s costly day-to-day spending obligations towards capital projects that will spur growth.

The BCC poll of 1,800 UK firms by the BCC found that 42pc of businesses backed a combination of public spending and tax cuts as the recipe to rescue the beleaguered UK economy, compared to 13pc in favour of higher taxes and higher public spending.

Priority should go to economic development - including trade promotion and business support - according to 68pc of those polled, with 57pc ranking education among key areas and 47pc backing transport.

found that they wanted on average to see a 3:1 split of current to capital spending as opposed to the present ratio of 13:1.

Sweatshop UK warning

Britain will be turned into a “sweatshop”, with workers being exploited, if social benefits of being part of the European Union are removed, a senior union leader has warned.

Paul Kenny, general secretary of the GMB, said changing the relationship with Europe could leave workers with no employment rights and cuts to their wages.

He told the GMB’s annual conference in Plymouth that it was clear a referendum on Europe would be held, but warned that the Conservatives wanted to use it to water down employment rights.

EU directives have protected working hours and employment rights, but these could be removed if the UK opts for “Euro-lite” membership, he said.

“A referendum is inevitable, but Labour needs to explain to people what would happen to jobs, pay and rights if we withdraw.

“Many big investors are here because of the easy access to Europe. Some companies are already acquiring operations in Europe in the event of the UK pulling out.

“Britain could be turned into a sweatshop, with no rights, low wages and workers being exploited.

The BCC is calling for a greater focus on investing in areas such as transport, energy, education, digital and other local economic infrastructure, such as road maintenance and house building.

It has joined demands for an end to ring-fencing of some departmental budgets “for short term political gains”, ahead of the Government’s spending review later this month. Foreign aid and health are protected from the brunt of spending cuts.

The BCC’s survey The least important areas were foreign aid - seen as important by just 1% - and social security (6%), according to the figures.

Caroline Williams, chief executive of Norfolk Chamber of Commerce said: “Feedback from our members agrees with the BCC survey that the top three areas they would like the Government to prioritize are economic development, education and transport. Norfolk has the opportunity to build on its current successes but businesses needs the Government to invest particularly on infrastructure and provide support to access finance and new international markets to enable this to happen”

BCC director general John Longworth said: “This is the Chancellor’s last chance to make a real difference to the health of the UK economy, this side of the next general election.

“Our spending review submission, based on business opinion, is calling for a radical shift of focus towards areas like infrastructure, economic development and skills - the big enablers of an enterprise-friendly economy.”

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