Show backbone and drive growth, business tells Government

The British Chambers of Commerce (BCC), which represents more than 100,000 UK firms, now believes there will be no 
growth this year, as output will shrink by 0.4 per cent before a rise of 1.2 per cent next year, compared with its 1.9 per cent forecast in June.

It wants immediate action to lift the economy from “a vicious cycle of stagnation” by giving firms bigger tax breaks for spending on plant and machinery, as well as by lowering National Insurance contributions to encourage job creation and providing more support for housebuilders.

The BCC had already called for a long-term plan, such as boosting infrastructure spending and creating a state-backed business bank, but now believes a short-term stimulus package is also needed. And it urged the Government to reallocate funds towards boosting investment.

BCC director general John Longworth said: “Politicians need to get some political backbone and show leadership.

“We are a great country, as we demonstrated during the Olympics – we have the talent and the energy but we need the political will to focus relentlessly on economic growth.”

A Treasury spokesman said: “The Government is doing everything it can to get the economy moving – the Funding for Lending scheme will help boost lending across the whole economy, and the Government is using the UK’s market credibility to support investment in major UK infrastructure projects.

“Growth in the year to date has been disappointing but, despite the difficult current conditions, employment is rising, and inflation has halved since its peak last year.”