Posted on 15/05/2013

The Institute of Directors and the Item Club also call for infrastructure boost

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The Institute of Directors (IoD) and the Ernest and Young Item Club are calling on Chancellor George Osborne to boost infrastructure in Wednesday's budget. The calls follow that of the British Chambers of Commerce and CBI.

The IoD, which represents over 35,000 business leaders in every sector of the UK economy, is urging the Chancellor to build on the deficit reduction programme through further improvements in tax, regulation and infrastructure.

Simon Walker, Director General of the IoD, said, "This budget is the time to build on [George Osborne's] work so far with radical steps to make Britain the best place in the world to do business. He must ensure that where money is available for investment it is focused on specific priorities, not fritted away in a wide range of special interest schemes.

"Out economy will return to growth when the energy and expertise of British business is unleashed, and international investment is attracted."

A report by the Item Club is calling for a £10 billion package of 'shovel ready' infrastructure projects in each of the next two years. The organisation acknowledges that this will have to be financed through borrowing initially but added it would largely pay for itself after three years.

The report also suggested that the extra capital spending announced in the Autumn Statement was too small to have any significant economic impact and was a 'missed opportunity'.

Andrew Goodwin, senior economic advisor to the Item Club, said,"To provide a short term economic boost, Government needs to look at projects where planning and logistics have already been completed. It could be repairing pot holes, building roads or even maintaining schools, but they need to be up and running quickly."

The group warned that the Chancellor would need to be flexible in his approach as 'growth may mean more borrowing'.

Graydon conducted a Pre-Budget Viewpoint survey to find out how businesses felt about the wider economic situation and what measures they felt the Government should be taking to kick-start the economy.

Overall respondents felt the economic situation would stay largely the same for the next twelve months. There were little strong feelings, with only 2 per cent of respondents expecting a lot of change either way, suggesting the majority expect stability over the course of the year.

Overwhelmingly those surveyed supported freezing business rates, reducing corporation tax and increasing sources of funding. Just two per cent felt that none of these measures were important to the economic future of the country and their organisation, indicating a general consensus about how to boost the economy.

Download you copy of Graydon's Pre-Budget Viewpoint Report here.