State is strangling job creation, says CBI

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The Independent Online

Business leaders will today warn that the growth in the public sector is strangling job creation in the private sector while the Government is imposing too much red tape and tax on UK companies.

Digby Jones, the director general of the CBI, will use his new year message in a speech later today to urge the Government to step up efforts to build a more entrepreneurial Britain. "High employment masks the true state of the labour market as public sector jobs rise and manufacturing jobs go," Mr Jones will say.

The British Chambers of Commerce (BCC) yesterday echoed the CBI's concerns over rampant growth in public spending, calling for a wholesale reform of the public sector.

David Frost, the BCC director general, said: "Government should learn to operate on their current finances rather than continually expanding and then requiring us to pay for it.

"The most important thing that the Government could do for business in the new year is to put a hold a new business taxes and simplify the current tax and regulatory system."

The CBI believes the Government should use the relatively stable state of the UK economy to drive through an "agenda for enterprise" to help cope with a more competitive international outlook.

Mr Jones will say that while business had been encouraged by pledges from the Government not to add further to the business tax burden and to fight inappropriate European legislation, companies also want policies designed to boost skills, innovation and international trade.

Mr Jones will warn that many businesses and trade unions are simply failing to adapt quickly enough to the higher demands of the modern world.