Bosses fear spending cuts will hit the recovery

Nov 30 2009 by William Green, The Journal

BUSINESS chiefs are warning “slash and burn” cuts to public spending would spell disaster for the region.

The North East Chamber of Commerce (NECC) and major motor dealer Benfield spoke out ahead of the Chancellor’s critical pre-Budget report next month.

All the main parties are promising cuts in public spending despite the sector playing a key role in the North East economy.

With around one in three of the region’s workforce employed in the public sector, any squeeze on public spending could have a huge impact.

The NECC said the Treasury had a responsibility to curb spending and find savings in the public sector in its submission to Chancellor Alistair Darling before the pre-Budget report.

But NECC chief executive James Ramsbotham said: “Now is very definitely not the time to slash and burn the very measures that have set us on track for recovery.

“The Chancellor has some hard decisions ahead of him to redress the hefty public debt but any cuts that come must not be in frontline support aimed at stimulating business growth.

“It will fall at the feet of businesses to drive through the economic recovery. They alone are capable of generating the profit and employment from which taxes are raised for the public purse.

“It would be wholly unacceptable to expect firms to do this with one hand tied behind their backs. The stimulus measures introduced to date must be allowed to run their course.”

And the NECC, which represents more than 4,000 businesses employing about 30% of the regional workforce, has told the Chancellor what measures would boost growth.