Budget 2013: 'Austerity drive set to fail without renewed growth'
CHANCELLOR George Osborne has been warned by Notts firms that his austerity drive could become unsustainable unless he speeds up measures which drive economic growth.
Derbyshire and Nottinghamshire Chamber of Commerce – the third largest Chamber in the country – has handed the Chancellor a wish list on the eve of what is being seen as a crunch Budget speech.
Chamber bosses have demanded that Mr Osborne puts the brakes on major business costs and steers what money he has got into more "productive" areas of the economy.
In a clear sign that firms are frustrated with the pace of growth in the economy, Chamber chief executive George Cowcher said: "Bold action must be taken now to boost confidence so that businesses can create wealth and prosperity.
"That means both delivering on existing promises and taking radical action today, not tomorrow."
The Chancellor will make his Budget speech on Wednesday, with the pressure on to announce measures which will kick-start stuttering economic growth.
The headline Budget measures demanded by the Chamber are based on the views of its own member companies, which it polls every three months in its benchmark Quarterly Economic Survey. In the wake of the QES, the Chamber is calling on the Chancellor to:
Freeze business rates for three years.
Freeze fuel duty.
Speed up the introduction of a British business bank.
Triple the lifetime limit for the relief entrepreneurs can claim on capital gains tax.
The Chamber also wants to see Mr Osborne set up a £100m voucher scheme which would allow 20,000 small firms to spend up to £5,000 on advice, support and training.
Mr Cowcher says it must also take some tough decisions on switching spending away from "unproductive" Government activities into measures which will quickly boost growth.
This could include major cuts in business tax, universal benefits, but big increases in infrastructure spending.
Around 60 per cent of Chamber members across Notts and Derbyshire still back the Government's deficit reduction strategy, but they fear that in the absence of sustained economic growth the austerity drive will become impossible.
Mr Cowcher said: "Government spending remains far too focused on unproductive programmes rather than measures that underpin economic growth, wealth creation and prosperity.
"With subdued levels of economic growth, it is not acceptable to protect wasteful current spending at the expense of capital investment and tax cuts that can spur long-term growth."
Besides its headline measures and the call for a radical shift in spending priorities, the Chamber also wants to see the Government redouble its efforts to make private-sector investment in the UK's infrastructure more attractive.
With the economy still heavily dependent on domestic markets, it has also called for more support for firms who export to overseas markets.
It says the Government should invest £100 million a year for the next three years on in-market support for exporting businesses.