Many UK businesses have backed the government’s plans to cut the deficit by imposing £81bn in spending cuts, Growing Business has discovered.
Chancellor George Osborne’s unveiling of the Comprehensive Spending Review revealed his plans to slash the deficit. He told MPs: "Today is the day when Britain steps back from the brink, when we confront the bills from a decade of debt."
According to the review the UK will undergo the largest spending cuts in decades, as the chancellor revealed plans to cut public sector jobs by almost half a million by 2014-15, to raise the pension age to 66 by 2020, and to introduce a new bank levy, saying these were unavoidable when the country had run out of money.
There had been concern in the private sector that public sector spending cuts would have a detrimental effect on business, however many business owners are supportive of the chancellor’s decision and reacted positively to the news.
Aaron Ross, chief executive of FirstCare, a UK absence management provider, told Growing Business: “The market is rapidly growing in the UK with many large private sector organisations realising the benefit and it is definitely time that the public sector started addressing the issue.”
According to Helen Holland, founder and chief executive of The Reptile Group, a consultancy firm based in London, the cuts are unavoidable. “What we are seeing is a painful but necessary re-adjustment to the realities of our economy, after 13 years of Labour mismanagement and out-of-control borrowing and spending,” she said.
However, all business owners emphasised the importance of getting the banks to lend to small businesses.
“The key issue now is to grow the private sector to re-balance the economy, but this won't happen unless the banks start lending to small businesses, which it is very, very clear they are not. The government should take steps to ensure that they do," added Holland.
Many private sector companies believe the job losses in the public sector will drive more skilled workers to their sector.
“There will be some highly-skilled talent available to be hired by the private sector,” commented Tom Nabielec, founder and chief executive of Perfect Storm Media, a search engine marketing company.
Mr Osborne concluded his speech by saying the four year cuts were guided by “fairness, reform and growth.”
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