CBI calls for ‘confidence-building Budget’

The Confederation of British Industry (CBI) has called on Chancellor Alistair Darling to deliver a ‘confidence-building Budget’ to help Britain through the recession.

In its Budget submission to the Treasury, the lobby group warned that the ‘alarming’ state of public finances rules out the possibility of further fiscal stimulus, as this would undermine business and investor confidence.

John Cridland, CBI Deputy-Director General, said: ‘The public finances have been battered by the cost of rising unemployment and lower tax receipts during the recession. With economic activity expected to contract by 3.3% and unemployment set to reach nearly three million this year, the outlook for the public finances is already alarming.

‘Against this backdrop, a further significant fiscal stimulus is unaffordable and would lead to businesses and households retrenching in fear of higher tax bills in the future.’

The organisation has instead unveiled a package of measures which it claims will underpin confidence, boost competitiveness and safeguard jobs.

These include delaying the increase in employer National Insurance Contributions due in 2011 and smoothing out the volatility of impending rises in business rates.

The group has also called for the introduction of a temporary ‘scrappage’ scheme to encourage consumers and businesses to replace old cars, fridges and washing machines with newer models. It believes the scheme will promote consumer spending while reducing the UK’s carbon emissions.

The 2009 Budget will be presented by Chancellor Alistair Darling on 22 April.