George Osborne is facing widening calls from business leaders and influential economic thinkers to change economic policy, with the head of the CBI becoming the lastest to add their voice to the clamour calling for Plan B.
Writing in The Times on Monday, John Cridland urges the chancellor to intervene to help small businesses grow, and calls on Osborne to rethink his decision to dramatically slash capital spending.
At the top of the "too difficult" pile sits funding for small and medium-sized firms. Here are the businesses with the greatest potential to grow and create jobs, but the dramatic rise in borrowing costs means they can't. The UK's recovery depends on the ability of these companies to invest in new staff, equipment and buildings and, more important still, their ability to export goods and services. The trickle-down effect would be hugely beneficial.
Seperately the influential economist Andrew Sentance is urging Osborne to go further in cutting red tape to allow businesses to grow.
Writing in The Daily Telegraph, Sentance says:
In many areas, policy is moving in the right direction, but action needs to be bolder. That should include stronger action to ease the burden of business regulation and remove barriers to job creation - for example by creating a fast-track planning system for business developments which create jobs.
The two articles published on Monday can be seen as the latest voices in what appears to be a growing and possibly orchestrated clamour for Osborne to change course. On Sunday former Labour chancellor Alastair Darling threw his weight behind those calling for Osborne to do something, writing: "You really must act. And act now. Otherwise it will take years to get Britain's economy growing again to create the jobs we need. The need to get growth going - as the IMF recognises - is desperately urgent."
The Treasury is widely expected to announce a major house-building programme in the autumn as part of what the coalition likes to call "Plan A+", a shift in priorities away from purely reducing the deficit towards greater stimulus.
On Wednesday the revised growth figures for the second quarter of this year are likely to confirm that the UK economy remains in recession, and the influential IMF, while endorsing the coalition's economic strategy so far, has warned that unless there are signs of growth by the end of the year then the Treasury should consider changing course.
David Cameron has confirmed that George Osborne will be staying at Number 11 Downing Street after a Cabinet reshuffle, expected in about a fortnight.
Later in September the Liberal Democrat Chief Secretary to the Treasury Danny Alexander is expected to break cover and outline his party's alternative strategy at their conference in Brighton. Business secretary Vince Cable is actively pursuing his "industrial strategy" at the department for Business, Innovation and Skills, and the Lib Dems have suggested that Osborne is to obsessed with retaining the UK's triple-A credit rating at the expense of everything else.
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