Cutting budget deficit 'a priority'

A report has revealed that cutting the budget deficit is a top priority
12 April 2012

Firms want the next Government to "get a serious grip" on public finances and slash business red tape, according to a new report.

Research by the British Chambers of Commerce (BCC) showed that two out of five companies wanted the incoming Government to make reducing the budget deficit its top priority.

A fifth of the 400 firms questioned called for red tape to be cut, while 13% argued the focus should be on making the country's tax system more competitive.

Businesses said increasing National Insurance contributions (NICs) would be the most damaging tax.

BCC director general David Frost 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.

"Companies have and will continue to play their part in creating wealth and jobs, generating economic growth and driving recovery, but the right environment needs to be in place.

"Raising a damaging tax on business, like NICs, will be counter-productive. It will mean fewer jobs and less tax revenue in the long-term. While businesses fully understand the need to bring down the UK's deficit, they are clearly saying that using VAT would be a less damaging way to achieve this.

"So let's scrap the NICs tax on jobs and offset it with a 1% 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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