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Government urged to offer businesses more support by CBI
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Director-general of the Confederation of British Industry (CBI) Sir Richard Lambert launched a scathing attack on the government's economic growth policies this week.
The outgoing - and outspoken - industry expert claimed that the government was being inconsistent when it came to tackling the budget deficit and promoting growth in the UK.
In his final speech as head of the CBI, he said that while spending cuts were preferable to tax increases, the government's motivation was more political than economic in some situations.
Sir Richard said: "Spending cuts do less damage to employment and growth over the long term than do tax increases. And the squeeze on fiscal policy will allow monetary policy to remain looser for longer."
However, he added: "[The government has] taken a series of policy initiatives for political reasons, apparently careless of the damage that they might do to business and to job creation."
In particular - Sir Richard denounced the coalition government's immigration cap policy, which he claimed was still a major source of concern for both businesses and institutions like universities.
He said that private firms - like energy companies - have a considerable amount of cash on their balance sheets, but they need a strong and consistent signal from the government if they are to invest that capital and create jobs.
"If the policy framework is right, this investment will be forthcoming," Sir Richard said.
He told business leaders that ensuring growth in private sector investment and trade is the only way the UK economy could bounce back following the worst recession since the 1930s.
Sir Richard noted that if the UK economy fully recovers from the effects of the recession, it is conceivable that the private sector could create 1.5 million new jobs in the next five years.
At the end of last year, the CBI published figures for the financial service sector which showed strong growth in the industry, but at the time, CBI director-general designate John Cridland claimed that continued growth was by no means a certainty in the short term.
Posted by John Lynes
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