The Confederation of British Industry has called for £500 million of tax cuts for employers, to encourage business investment. The employers’ group has lowered its forecast for 2012 from 2.2 percent to 1.2 percent. The reason for the move from the original prediction in August this year, is concern that businesses won’t invest as the Eurozone creates a lack of confidence in the private sector.
The government are reliant on investment by private sector businesses to aid recovery. However, the CBI has lowered expectations of 9.3 percent business investment, to just 6.9 percent this year. The director general of CBI, John Cridland has called for the first years employers’ National Insurance Contributions for new employees below the age of 24 to be scrapped, and a carbon floor price exemption for industries which are energy intensive.
Cridland estimates that the cost of these “creative” ideas which would stimulate investment from the private sector, would be £500 million. He said:
“If they could find £200m for weekly bin collections, I don’t think we’re asking for too much for things which are very important for the economy as a whole.”
The chief economic adviser for CBI, Ian McCafferty said there is an increased risk of a double dip recession, but there should be an improvement in the second half of 2012, as inflation is overtaken by pay increases. KPMG also reported the first reduction in permanent job placements by recruiting companies since July 2009, indicating employer’s unease regarding the economy.
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