Growth plans required as well as cuts
Business groups have emphasised that cuts in government spending are not enough by themselves to encourage economic recovery.
A strategy for growth is just as important, they have argued.
While supporting measures to reduce the budget deficit, business leaders have also argued the case for plans to promote private sector expansion.
Commenting on the Chancellor’s speech at the Conservative Party Conference, David Frost, director general of the British Chambers of Commerce, said: “George Osborne not only set out a clear explanation of why immediate steps have to be taken to reduce public expenditure, but importantly outlined the central role of business in driving economic growth, and the need to maintain investment in crucial infrastructure projects.
“However, it is vital that we shift the focus of the national debate from the necessary spending cuts to one of growing the UK economy. We need to regain our self-confidence, and it will be business that is at the heart of this – but only if it is given the freedom to create jobs and wealth.
“This is why it is critical that the burden of red tape is reduced, and sufficient help is given to exporting companies. 2011 has to be the ‘Year of Growth’, and the only way to achieve this is by ensuring that we create the right environment for a strong and flourishing business community.”
Steve Radley, director of policy at EEF, the manufacturers’ organisation, added: “Over the coming month, the major announcements in the pipeline must show more detail of the government’s overarching economic strategy.
“Manufacturers will be looking for government to demonstrate that it is targeting resources at growing the productive potential of our economy and creating the conditions for businesses to invest and grow.”
It was a sentiment echoed by Richard Lambert, the director general of the CBI.
Mr Lambert said: “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.”