Wednesday, 31 March 2010

'Double-Dip' Recession Possible.

by Ben Aulakh

Businesses in London are warning of the potential of a double-dip recession, in the wake of last Wednesday’s budget.

A poll – carried out by the London Chamber of Commerce and Industry (LCCI) and Comres – has shown that employers in London are not impressed with the Chancellor’s latest fiscal measures.

The number of businesses who took part in the poll that said they are now expecting a double dip recession has risen by eight per cent from January, to 55 per cent.

Companies are worried by what they see as the Chancellor’s failure to outline plans for tackling the UK’s public debt.

Colin Stanbridge, Chief Executive of the LCCI said. “The Chancellor’s failure to outline concrete plans to tackle the deficit, and the rise in those predicting a double dip recession suggests his inaction could start to affect the UK’s economic performance.”

Almost 79 per cent of company’s say his measures do not go far enough in reducing the deficit.

There is also strong opposition to the government going ahead with planned rises in National Insurance Contributions (NICs) with 70 per cent of firms saying it was the wrong move.

Mr Stanbridge said, “The government’s decision to plough ahead with the National Insurance rise was deeply disappointing because it will, in effect, act as a tax on jobs and discourage companies from taking on new staff.”

Also sixty six per cent said that they would have preferred to see the government raise VAT rather than NICs.

He added, “Many company owners will feel that the government is giving with one hand and taking away with the other as the Chancellor refused to back down on National Insurance rises, which will hit business hard.”

However Mr Stanbridge admitted that there was some good news for the business community with measures to cut business rates, increases in public sector contracts for small firms and the doubling of the annual investment allowance.

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