Act now to tackle £175bn deficit in next parliament, CBI boss urges

THE head of the Confederation of British Industry (CBI) has called on the government to act decisively and bring forward credible plans to deal with Britain's £178billion budget deficit within the life of the next parliament.

Richard Lambert, the group's director-general, said he was "certainly not satisfied" with plans to tackle the record shortfall set out in last month's Pre-Budget Report. He argued that Chancellor Alistair Darling had put off much of the "heavy lifting" needed to bring the deficit down until the parliament after next – five years or more away.

In a generally upbeat look ahead at the UK's prospects for the new year, the CBI boss added that most economists expected national income to grow in the year to come. The economy would benefit from a more stable banking and business environment and trade would be boosted by the low-value of sterling, while the pain from dealing with the deficit was unlikely to be felt until 2011.

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Despite Conservative claims that they would rein in borrowing more swiftly than the Labour government, Lambert said it was "highly unlikely" the squeeze would start before the second half of next year whichever party wins an election that must take place by 3 June. He said: "(The government is] leaving a lot of the heavy lifting in terms of getting the public finances back into shape to the parliament after next. That's not starting for five years' time."