The heads of pub, hotel and restaurant operators Whitbread and Fuller’s have joined leaders of some of the UK’s largest companies in a strong show of support for the government’s proposed spending cuts.
Writing in a letter to The Daily Telegraph today, executives from 35 of the country’s leading firms said that failing to take urgent and immediate action to address the budget deficit would reduce international confidence in Britain and hike up interest rates for businesses.
Joining chairman of Whitbread Anthony Habgood and Michael Turner, the executive chairman of Fuller’s was Paul Walsh, chief executive of the drinks giant Diageo and Gerald Corbett, chairman of soft drinks maker Britvic.
The bosses of Marks and Spencer, BT and GlaxoSmithKline were also among those to sign the letter.
Consumer confidence is key
The letter states: “Addressing the debt problem in a decisive way will improve business and consumer confidence. Reducing the deficit more slowly would mean additional borrowing every year, higher national debt, and therefore higher spending on interest payments.”
Delaying would result in deeper cuts and further tax rises to pay for the extra debt increase, they say.
“The cost of delay could be even greater than this. As recent events in some European countries have demonstrated, if the markets lose faith in Britain, interest rates will rise for all of us.”
Addressing the issue of job losses, the business leaders say the private sector should be “more than capable” of generating additional jobs to replace those lost in the public sector. In addition, redeploying people to “more productive activities” would improve economic performance and ultimately generate more employment opportunities.
They urged the government and George Osborne, the Chancellor, to move ahead with planned budget deficit proposals.
“In the long run it will deliver a healthier and more stable economy.”
Osborne will on Wednesday announce the details of the government’s spending review, which seeks to make £83bn savings in state spending.