March, 08, 2010

Whoever the next chancellor is, he needs to start cutting the public finance deficit almost immediately with the aim of balancing the books by 2016, two years earlier than planned, the Confederation of British Industry has said.Echoing calls by the Conservative party for more rapid action to tackle the debt, the CBI's director Richard Lambert wrote to Chancellor Alistair Darling to say that the next budget must have at its core an aggressive fiscal policy.

"The government must act now to set out a convincing, credible pathway for balancing the books," he wrote. "Investors are clearly jittery about sovereign debt, but are prepared to give the UK the benefit of the doubt until after the election."Lambert said that better management of public spending and public sector reform could save over £130bn and he criticised the government for "resorting to damaging tax rises", including an increase in employers' National Insurance contributions which he said was a "direct tax on jobs".

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