Business leaders have called government pledges to maintain spending on health “unrealistic and unsustainable”, and have urged more drastic public sector cuts in the Emergency Budget.
Chancellor George Osborne should introduce an immediate two-year freeze on public sector wages and drop plans to increase employers’ National Insurance contributions, according to the British Chambers of Commerce (BCC).
The group made a Budget submission to the Chancellor, acknowledging his “difficult” task in balancing the books but calling for urgent reform to “rein in” the cost of public sector pensions and arguing against capital gains tax increases.
David Frost, BCC director-general, said: “If tax rises are unavoidable, they should be targeted at consumption taxes rather than payroll, income or profits.
“As politically unpalatable as it may be, the decision to ring-fence spending on health and overseas aid is unrealistic and unsustainable in the current circumstances.
“Ring-fencing health will mean deeper and more drastic cuts to important investment elsewhere, without the benefit of clear justification.”
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