Business leaders are calling on the Chancellor to ensure his Pre-Budget Report delivers a credible plan for balancing the public finances by 2015-16, two years earlier than planned.
The CBI believes this is needed to boost investor confidence and get the UK on the path to recovery. But it is warning that the government will need to take an extra GBP120bn out of current spending plans to balance the books.
The UK's leading business group says GBP50bn will need to be found between now and 2013 to allow for a slower economic recovery than the government is predicting, and a further GBP70bn will be needed after 2013 in order to balance the budget by 2015-16, rather than by 2017-18 as set out in the April Budget.
The CBI is currently setting out its strategy for getting the UK on the road to sustained growth ahead of the Pre-Budget Report. It involves bringing the public finances back into balance, a radical re-design of the way public services are delivered, and introducing a range of low-cost measures to position the economy for recovery.
The organisation believes that if government adopts these proposals it could avoid large tax rises and crude spending cuts at a time when the economy is still fragile, while at the same time delivering high-quality public services.
John Cridland, CBI Deputy-Director General, said that raising taxes and cutting capital spending when the economy is still fragile would hurt families and businesses when they can least afford it. The only sensible option is to try to do more with less.