17 November 2009
Supporting UK growth while balancing the budget
Government should prioritise tax and spending according to
economic impact – business report
London businesses will today (Tuesday 17 November) call upon
Government to apply rigorous analysis of economic benefit and cost
when deciding tax and spending priorities, so as not to derail
London and the UK’s economic recovery.
The call is made in a new paper – Supporting UK growth while
balancing the budget - jointly authored by business group
London First and City of London Corporation and overseen by a
steering group of business leaders. The steering group is
co-chaired by Stuart Fraser, the City’s Policy and Resources
Chairman, and Ian Powell, PwC Chairman. Drawing from an
in-depth economic report (see notes to editors), it considers how
decisions on both spending cuts and taxation increases can be made
with the least damage to London and the UK’s economic
prospects.
The paper, to be launched at a Whitehall venue, restates the
role of London as a global centre for trade and investment, and the
broad economic benefits it brings to the whole of the UK. Its
conclusions include: an approach to Government efficiency savings;
the need for rigorous cost benefit analysis when deciding whether
to spend or cut programmed spending; maintaining vital investment
in London’s transport infrastructure, and; protecting London and
the UK’s international competitiveness when adjusting tax
policy.
Ian Powell, Chairman and Senior Partner of
PricewaterhouseCoopers LLP, said:
“We recognise that Government faces a huge challenge in
re-balancing the economy and the country’s finances. Hard choices
on spending and taxes have to be made. Business is saying that
these decisions must be taken in a coherent way that best supports
the long-term investments needed to create a sustainable recovery
for the UK economy. What business craves is a stable, supportive,
environment to enable long-term investment decisions to be
made.”
London has attracted international talent, businesses and
capital to generate globally competitive specialisms in
professional services, creative industries, finance and higher
education, among others. Each of these sectors supports a large
workforce based largely outside London. In every survey comparing
the merits of global business locations, the issue of transport is
identified as a top priority. London’s transport infrastructure is
both an asset and a risk to the capital’s future success, suffering
as it has from several decades of underinvestment.
Stuart Fraser, Chairman of Policy and Resources of the City of
London, said:
“If the UK is to secure sustained economic growth, we must
maintain planned investment in the capital’s transport
infrastructure. While the committed public expenditure of around
£36bn between now and 2017 is substantial, it is modest compared
with the scale of London’s economy and the benefits it will bring
to the UK as a whole.
“The tax regime is another crucial element of competitiveness.
The Government’s approach to taxation must be informed by the
factors that underpin the capital’s success as a global centre for
trade, including the highly mobile nature of money, and of people,
in and out of London. Further rises in marginal tax rates could
derail the economic recovery by making London and the UK less
competitive than their global rivals.”
Ends
Notes to editors
Supporting UK growth while balancing the budget – a report from
London business is available in hard copy on request, or
online.
Supporting UK growth while balancing the budget – a report from
London business represents the views of a steering group comprising
members of London First and the City of London Corporation,
co-chaired by Stuart Fraser, Chairman of Policy and Resources of
the City of London, and Ian Powell, Chairman and Senior Partner of
PricewaterhouseCoopers LLP. It draws on a report,
commissioned by London First, to develop an evidence-based approach
to prioritising tax and spending measures that will best support
and enhance London's contribution to the sustainable growth of the
UK. The full report was prepared by LECG, a global finance
and economic consultancy, and jointly funded by London First
members and the City of London Corporation.
Press contact
For more information contact Sanjay Odedra on 020 7332
1835.