Chancellor challenged ahead of Pre-Budget Report

Business and workers' groups have laid down the gauntlet ahead of tomorrow's Pre-Budget Report, challenging the chancellor to provide a boost to the economy and help the unemployed.

After revising downwards its GDP growth forecasts, the British Chambers of Commerce (BCC) called for an extension to the Enterprise Finance Guarantee scheme - previously singled out by the Federation of Small Businesses as important for supporting firms that innovate.

The BCC has also said that the annual investment threshold - which allows businesses to plough capital back into themselves - should be increased, while Small Business Rate Relief should be automatic, to ensure that no firms miss out by not applying.

At the same time, the organisation is saying that the Government should set out how public spending will be cut over the term of the next Parliament. It is demanding a public-sector pay freeze and the realignment of pensions so that they are more in line with their private sector counterparts.

BCC director-general David Frost said that the solutions to the economic problems are "quite obvious", calling for a 'rebalancing' of the economy "away from debt and the public sector".

"Allow the private sector to generate investment, growth and jobs by reducing the red tape and tax burden," he added.

However, announcing the British Retail Consortium's Retail Sales Monitor for November, director-general Stephen Robertson pointed to public concerns over Government spending cuts - alongside uncertainties over job security and tax hikes - as undermining consumer confidence.

Meanwhile, the Trades Union Congress (TUC) has spelled out what it believes needs to be done. General secretary Brendan Barber warned that the chancellor "must do nothing to endanger economic recovery", while calling for more help for the jobless and a windfall tax on bankers' bonuses.

IMAGE Dominic Lipinski/PA Wire