Brown Warned Not To Tax His Way Out Of Slowdown

by Robin Pilgrim, LawAndTax-News.com, London

16 August 2005

Speaking last week, head of the Confederation of British Industry, Sir Digby Jones warned that Chancellor Gordon Brown risks creating a major split between the UK's business community and the government if he attempts to increase taxes to compensate for lower than expected economic growth.

Expressing concern with regard to the Chancellor's recent adjustment of the start date of the current economic cycle, Sir Digby suggested that the move had led to doubts about Mr Brown's economic "street cred".

According to an Observer report on the matter, the CBI boss went on to add that in the past: "We might not have agreed with everything he's done. But the one thing we've admired is his transparency, and the fact that he definitely seems to have stuck to the rules."

However, he went on to suggest that the Chancellor's 'Golden Rule' is coming under pressure, observing that:

"If he doesn't cut back his public spending and he doesn't borrow more, he is going to have to put up taxes."

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