Sir Richard Lambert, the outgoing head of the CBI, has said that there needs to be a greater focus on economic growth.
In his farewell speech to the employers’ organisation, Sir Richard argued that plans to cut the budget deficit need also to be accompanied by higher levels of output and employment in order to boost tax receipts.
He said: “The sooner we can get output back up to the levels that were expected before the recession, the quicker government revenues will rise to narrow the fiscal gap.
“It’s not enough just to slam on the spending brakes. Measures that cut spending but killed demand would actually make matters worse.”
The CBI cites business investment and exports as the two engines for growth, with clear policies on both urgently needed.
Sir Richard added: “The growth white paper that was promised last autumn never materialised, and the impression was given that there simply weren’t enough good ideas around to justify such a publication.
“Rather than a big picture of the kind of economic eco-system that the government wants to champion, we are left with a few rather vague ideas about the scope for supporting a number of predictable sectors, and the promise that more ideas will be forthcoming at the time of the spring budget.”