According to the director general of the Confederation of British industry, John Cridland, it will be the private sector which will drive the UK economy throughout this year and over the foreseeable future. Even so, confidence in the business sector remains weak and it is the hope of CBI that increased investments in this sector will be the key to a stronger economy.
In an article released by the Guardian, the CBI was quoted as saying that the Chancellor should focus on coaxing big businesses into stronger investments. It is further felt that he should ensure credit reaches struggling smaller firms.
As detailed in Chancellor Osborne’s autumn statement of last year, he aims at making the tax regime of Britain the most competitive within the G20. Even so, the director general of the CBI believes that this tax regime could go even further in order to encourage corporations to invest enough to foster growth within the economy.
Cridland further believes that in the upcoming budget to be announced in March, the Chancellor has ample opportunities to make the UK tax system as competitive as possible within international market. Conversely, Ed Balls of the Labour Department believes that there should be sizable tax cuts in order to prevent a depression on a magnitude comparable to that of the 1930s.
Because there is a lack of a traditional credit supply from banks, the CBI is also backing alternatives which would include the ability of medium-sized enterprises to begin issuing bonds much like larger corporations do. As well, the director general of CBI is on record as advising against keeping environmental taxes on business during this time and future growth is in question.
The CBI is also suggesting that the Chancellor rethink his aim of raising passenger duties to 8% as they feel 5% would be more in keeping with the current economic health of the aviation industry. Finally, Cridland is asking that the Chancellor look at various ways in which larger companies can be incentivized to finance smaller companies.