Business group wants end to NHS ringfence

By Alex Stevenson

Protected NHS and aid spending may have to face cuts if the economy does not recover by next spring, the British Chambers of Commerce (BCC) has said.

The BCC has called for "radical action" to be taken if the economy does not return decisively to growth by the next Budget in a letter to chancellor George Osborne.

Both the Department of Health and the Department of International Development had their budgets ringfenced in the comprehensive spending review.

Ministers should be prepared to consider 'dismantling' the ringfence if the recovery does not begin soon, the BCC says.

Pressure on the coalition to change aspects of its deficit reduction strategy is growing as the economy continues to stagnate.

Opposition calls for a 'plan B' are opposed by the BCC. But this has not stopped it backing 'plan A+' for the autumn statement, which would feature more "growth-enhancing policies".

"The future of the recovery relies upon stimulating growth across businesses," BCC director-general John Longworth said.

"Only a strong and prosperous private sector will allow us to provide the public services we all want and need.

"The government needs to be prepared to introduce a package of measures that will strengthen business confidence, allowing them to grow, invest, export, and create jobs."

A 1p reduction in employers' national insurance contributions, the abolition of the 50p tax rate and a "reprioritisation" of spending to promote investment and exports were all called for in the BCC's letter.

It also backed the provision of extra trade finance support for small- and medium-sized businesses, doubling the annual investment allowance and restoring the UK Trade and Investment budget.

"The coalition has yet to display enough urgency on tackling those issues facing businesses," Mr Longworth added.

"While the government has identified many of the right policies, they must be delivered as a matter of priority."