U.K. business leaders urged Chancellor of the Exchequer George Osborne to do more to boost growth, arguing his government is doing “too little, too slowly.”
A poll of 1,277 members of the Institute of Directors published today by the London-based business lobby group found a majority thought Prime Minister David Cameron and Osborne had been “ineffective” at reducing tax, tackling regulations on businesses and simplifying employment laws. The poll, which also found that more than four out of 10 companies have delayed at least one investment or employment decision this year due to uncertainty, was carried out between July 26 and Aug. 3.
“We don’t want to see any slowdown in deficit reduction but we do want to see much more aggressive supply-side action,” IoD Chief Economist Graeme Leach told BBC 5Live radio today.
Osborne is under pressure after figures published yesterday showed Britain unexpectedly posted a budget deficit in July as corporation-tax receipts plunged, partly due to the closing of the Elgin gas field in the North Sea.
While the drop in revenue was largely centered on company taxes, the U.K.’s struggle to climb out of a recession has raised concerns that the chancellor will miss his forecast for a deficit of 120 billion pounds ($190 billion) in the current fiscal year. Osborne has resisted demands to ease the pace of his fiscal squeeze, saying his plans have helped to insulate Britain from the euro-area debt crisis.
The opposition Labour Party seized on the IoD’s report to repeat its call for a package of measures to stimulate the economy. Labour’s business spokesman, Chuka Umunna, described the criticism from the IoD as “quite extraordinary.”
“What we saw was in the wake of the government’s comprehensive spending review back in 2010, confidence nosedived, but then demand and orders dried up, and that’s what so many businesses are complaining about,” Umunna told Sky News television. “We need an immediate stimulus package to get demand back into the economy, to get those orders back, and then we can reduce the numbers of people out of work.”
The Daily Mail newspaper reported today that the government is planning to announce a series of measures to stimulate growth including relaxing planning laws, increasing infrastructure spending and revamping the Highways Agency, which oversees the nation’s roads.
Bank of England Governor Mervyn King has said there is a “black cloud of uncertainty” hanging over investment, further hindering the economy’s recovery.
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