Yahoo Finance CBI Urges Potholes Fixed To Boost Growth
The Chancellor is being urged to use the Autumn Statement to announce £1.5bn of spending on "short-term, high-impact" measures to support economic growth, including maintenance on the UK's crumbling road network.
The business lobby group the CBI wants George Osborne to stick to his deficit reduction plans but says he must do more to help business drive recovery.
The CBI believes the coalition underspent by £7.8bn last year and argues any spending on growth would easily be covered by a £4bn windfall from the 4G spectrum auction next year.
It also presses the case for a business bank and warns against any reduction in pension tax relief.
CBI Director General John Cridland said: "The CBI fully supports the Government's deficit reduction plan.
"This is critical for the UK to keep the confidence of international markets."
But he argued that priorities must also include local government spending on road maintenance, capping business rates at 2% in 2013 and a new capital allowance incentive for infrastructure investment.
Responding to suggestions that the Government may reduce pension tax relief, Mr Cridland said: "Lowering the threshold below £50,000 is not a wealth tax - it's an income tax which would hit swathes of middle-income earners.
"This would hit small business owners who invested heavily in their companies in the early years so back-load pension contributions to the end of their working lives, particularly hard.
"It would also be a major blow to professionals saving in defined benefit schemes - like senior nurses, retail store managers or gas engineers - who get a pay rise or a promotion.
"Reducing the tax free limit would fly in the face of the Government’s efforts to encourage more people to save adequately for their retirement, and its drive to position the UK as a world-leading business investment location."
The CBI's submission is just one of a number of suggestions directed to Mr Osborne before his statement.
Earlier this week the Institute of Fiscal Studies warned he may have to raise taxes and cut spending more to plug gaps caused by weaker-than-expected economic growth.
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