Spending Review Reaction
THE GILTS EXPERT
Killik & Co provides advisory services to private investors of all sizes. It offers advice on a wide range of financial matters, including CFDs, equities, fixed income markets and funds of funds
INVESTMENT STRATEGIST
PATRICK GORDON
“The gilts market reaction has been fairly muted to the spending review although we did see a move earlier in the day in reaction to the unexpected rise in September public spending. In the background, the quantitative easing story is providing support and is keeping gilt yields low. Yesterday’s events had the potential to cause movement but they have not because expectations were largely met.”
THE HEADHUNTER
taylor bennett is a leading executive search firm exclusively focused on corporate communications within the UK, continental Europe, Middle East and Asia.
DIRECTOR
HEATHER MCGREGOR
“Everybody knows these cuts are vital – nobody wants to see the country go the way of Greece or Ireland.
The kind of clients we deal with at Taylor Bennett, the very high end private sector jobs, will be unaffected for the most part.
However, there are going to be very few public sector jobs around so it will be very tough indeed for someone working in public sector recruitment.
But if we want to avoid living in a banana republic, this is unavoidable.”
THE RETAILERS’ VIEW
THE British Retail Consortium (BRC) is the lead trade association representing the whole range of retailers, from the large multiples and department stores through to independents. It is recognised for its influence within government
DIRECTOR GENERAL
STEPHEN ROBERTSON
“These are serious plans to tackle the budget deficit and will remove some of the uncertainty which was driving down consumer confidence. Beginning to deal with the deficit now is right. Delays would just store up more pain for later, risking increased borrowing costs, higher taxes and more job losses.
But individual households and communities will continue to be cautious until the impact on their future prospects is clear. Retailers need the government to communicate exactly how the cuts will be delivered as soon as possible so that they can make investment plans.
It’s a tough judgement but the government has achieved the right balance between public spending cuts and tax increases. There are testing times ahead.”
THE GOVERNMENT CONTRACTOR
SAS UK develops information delivery software, working on large outsourced government contracts as well as providing training and support
MANAGING DIRECTOR
IAN MANOCHA
“Osborne’s rallying cry of ‘We must leave no stone unturned in our search for waste,’ is a positive one. If the public sector is to deliver on cuts, drive greater efficiencies, reduce fraud and error, and provide the services demanded of the public, then it must pinpoint wasteful practices and eliminate them.”
THE SMALL BUSINESS CHAMPION
leading entrepreneur, champion of small business and BBC Dragon, says the government is right to follow the lead of successful companies
CHIEF EXECUTIVE
JULIE MEYER
“As any chief executive of any size company knows, you can and must keep costs in line, but at the end of the day, you can’t survive as a company unless you have a growth story. Countries are no different. That’s what entrepreneurs do – they build growth stories. So as the nation readjusts its costbase to the new reality, the entrepreneurs are hard at work building growth, creating jobs, and through that, channelling taxable corporate income into the Treasury.”
THE TAX CAMPAIGNER
THE TaxPayers’ Alliance is Britain’s independent grassroots campaign for lower taxes, arguing that high taxation is bad for the economy
DIRECTOR
MATTHEW SINCLAIR
“It’s great news that the government is going ahead with necessary spending cuts to get the deficit under control and that politicians are finally setting out clear plans to deal with the fiscal crisis.
Many wasteful programmes are being cut and that will mean savings for taxpayers now and in the future. Unfortunately a number of measures that would save significant amounts of money while minimising the impact on services haven’t been taken, like a freeze in the International Development budget or pay cuts for the best paid public sector staff. Sensible and necessary cuts have been announced today but more can be done to deliver good value for taxpayers.”
THE BUSINESS LOBBYIST
THE CBI is the UK’s top business lobbying organisation, with influence over government, policymakers and legislators
DIRECTOR GENERAL
RICHARD LAMBERT
“The Chancellor has got the strategic direction of this spending review right. He has stayed the course outlined in the June budget, with economic growth a top priority.
We particularly welcome the extra £2bn a year on capital spending, and the focus on areas that support growth.
The spending cuts, though painful, are essential to balance the UK’s books and build its future prosperity.
We will wait to see the legislation on taxing banks, but the Chancellor has recognised two crucial points. He said he did not want to drive banks abroad, and he recognised that hundreds of thousands of jobs in the UK depend on our competitiveness in financial services.
It is essential that all policy makers recognise these important points. It is also vital that banks both rebuild their balance sheets and lend to companies, and excessive taxation would threaten both of these aims.
The additional investment spending will improve the country’s critical infrastructure, create jobs and stimulate growth. The chancellor rightly emphasised the reform of public services. It is only with fundamental re-engineering that we will see the leap in productivity needed to save money and deliver high-quality services at the same time.
We welcome the commitment of the coalition to tackle the spiralling cost of public sector pensions.”
THE DIRECTORS’ VIEW
the Institute of Directors provides support and information for business leaders as well as political analysis
DIRECTOR GENERAL
MILES TEMPLEMAN
“We strongly support the government’s determination to stick to its overall plan of reducing public spending quickly. The only way we get a private sector recovery underway is through macro-economic stability, and this will only be achieved with sustainable public finances.
Opponents of today’s spending reductions need to wake up to that fact. The alternative is a tax hike which would damage the economy in both the short and long term.
If today’s spending review is to succeed the government will have to deliver fundamental root and branch reform which transforms the productivity of the public sector.
We need to remember that if the public sector had matched the private sector’s productivity growth over the last decade, the deficit would now be £60bn less than it is. Less can be more.”
THE TRADE UNIONIST
The tuc has 58 affiliated unions representing 6.2m workers in the UK. It holds political sway and has close ties with the Labour party
GENERAL SECRETARY
BRENDAN BARBER
“Right across government the Chancellor has announced eye-watering cuts that will have a desperate impact on communities, business and hard-pressed families. But he has not had the guts to spell out the detail, and instead tried to talk up a few crumbs of good news.
Worst of all, to score a cheap party political point about Labour spending plans, he has loaded cuts on to benefits and welfare payments. Those who have not had a minister fighting their corner but who are most vulnerable to cuts have lost the most today. The poorest have become the victims of a political jape. But the biggest tragedy of all is that the spending review is likely to fail on its own terms. These cuts will depress the economy by causing a million job losses and undermining business and consumer confidence. There will be plenty of pain, but little to gain Public servants did nothing to cause the recession, but will pay a heavy price today. Their pay has already been frozen, now they face half a million job losses and increased pension contributions that will add up to a reduction in take home pay.
With spending cuts likely to cause another half million private sector job cuts, the idea that they will all get shiny new private sector jobs is wishful thinking. And if you add all of those meant to be returned to jobs by welfare reform, you end up in the realm
of fantasy.”