Local company directors have called on the government to change course
with its plans for spending and taxation.
A national survey of members of the
Institute of Directors (IoD) showed that an overwhelming majority
support the Bank of England's handling of monetary policy – but a
majority also think the Treasury's taxation and spending plans will
Stephanie Smye, chairman of the IoD's
Eastern Branch which represents more than 1,000 company directors
throughout Cambridgeshire, said:
"The government's tax and spend
fiscal policy is leading to a rising burden of taxation. IoD
economists estimate that the tax burden will have risen by almost 5
per cent of GDP over the ten years to 2006 - that's £50 billion in
"As a result of this, the
long-term GDP growth rate is likely to be reduced by 0.25 per cent.
Lower growth means riskier business conditions, less investment and
"In 2000 the proportion of the
UK's GDP which was taken by the government was significantly lower in
the UK than the average for the EU. Now it is heading towards European
"The prospect of this gap being
closed is very worrying. It may not make the UK economy the sick man
of Europe but it will make it pretty sickly in comparison with the
recent past. The trend is heading in the wrong direction and the
government needs to take action to turn things around."