City says 'failure is not an option' for Whitehall efficiency drive

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The Independent Online

Business said that Gordon Brown's efficiency drive across Whitehall's big-spending departments and initiatives to increase state-sector productivity could not afford to fail.

Business said that Gordon Brown's efficiency drive across Whitehall's big-spending departments and initiatives to increase state-sector productivity could not afford to fail.

While industry bodies praised the Budget for its "stability and efficiency", the City dismissed the annual package of tax and spending measures as a non-event. One of the City's senior investment bankers said: "I don't think the City was waiting here with bated breath. It was pretty much business as usual."

Digby Jones, the director general of the CBI, said: "I am delighted that the Chancellor has committed to increasing productivity from taxpayers' money. The Government will need sustained political courage to achieve genuine reform ­ failure is not an option."

Union leaders were more sceptical. Brendan Barber, the TUC general secretary, said: "The announcement of civil service job losses today had more to do with shooting the opposition's foxes than acting as a responsible employer."

The union did welcome what it called a "steady-as-she-goes" Budget but the retail industry reacted angrily to Mr Brown's failure to reduce red tape or keep consumer spending growing. "While there is virtue in stability, there is no virtue in wasting an opportunity to improve the poor value for taxes retailers receive for their contribution to the Exchequer or to roll back the cost burden on business," said David Felwick, chairman of the British Retail Consortium.

Another bugbear was the Chancellor's decision to tax distributions from small businesses to their owners. The Federation of Small Businesses said that the new 19 per cent distributive tax was unfair as the Government only last year changed corporation tax to encourage self-employed people to incorporate.

Overall, tax experts thought the Budget was broadly neutral. Mike Warburton, head of tax at Grant Thornton, said: "Even though it was the last Budget before an election in which he could really make an impact he has done nothing for saving and done nothing for business.''

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