Budget 2013: Businesses Want 'Radical' Action

Business organisations have called for "radical" measures to boost growth as the UK economy runs the risk of falling back into recession.

The Confederation of British Industry (CBI), British Chambers of Commerce (BCC) and EEF have suggested ways for the Chancellor to tackle the deficit while creating jobs.

The CBI said George Osborne could shift £2.2bn from current spending to "high-growth areas" such as the housing market.

It said 75,000 jobs could be created by spending around £1.25bn on building 50,000 affordable homes.

The organisation also called for £950m to be spent on business tax measures like a 2% cap on business rate increases.

Its Director General said the Budget, on March 20, was an opportunity for the Government to "kick-start confidence" among businesses and consumers.

"Our measures will provide another boost for the housing market and will benefit first-time buyers, those trapped in negative equity and those looking to refurbish their homes," John Cridland said.

"With its relatively short lead-in times, house building offers the most bang-for-buck in growth terms - unleashing pent-up demand while creating jobs and growth."

George Osborne will deliver the Budget on March 20

The BCC also urged the Government to shift its spending from "unproductive areas" to measures that deliver growth more quickly.

It called for 100,000 additional new houses to be built by the Government or housing associations by 2015, and for more investment in road building and repair.

The organisation's Director General John Longworth said time is running out.

"Our own research shows that firms across Britain believe they can drive growth this year but they can't do it alone," he said.

"Bold action must be taken now to boost confidence so that businesses can create wealth and prosperity. That means both delivering existing promises and taking radical action today, not tomorrow."

But although the BCC said it supported deficit reduction, Mr Longworth warned that it could become impossible without sustained economic growth.

He said Mr Osborne may have to apply shock treatment to the economy - including the controversial option of new borrowing to fund investment - if growth is lacking.

"If within the next six months there is no prospect of growth ... you might have to consider actually borrowing more money but you should only do it to fund areas that the market would forgive," he said.

It comes despite Mr Osborne and the Prime Minister ruling out any shift from their plan to rein in Britain's budget deficit.

Last week, David Cameron said the country would plunge "into the abyss" if the Government changed course from so-called Plan A.

The EEF, which represents Britain's manufacturers, said investment was needed in infrastructure, as well as increased competition in banking.

Chief Executive Terry Scuoler said: "Having made it clear that it is sticking to its current economic course, the Government must also demonstrate that it has the strategy to deliver the stronger economy that will pay down the deficit.

"This means accelerating action that will deliver public investment in key areas and unlock investment by the private sector."

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