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Richard Lambert, CBI Director-General, said:

“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. These include transport and other infrastructure, education and science, and the low-carbon economy.

“The spending cuts, though painful, are essential to balance the UK’s books and build its future prosperity.

“Now the Government must deliver its promised savings by re-engineering public services.”

Looking at the spending review in more detail, he said:

On capital spending:

“The additional £2bn a year of investment spending will improve the country’s critical infrastructure, create jobs and stimulate growth.

“We particularly welcome the news that Crossrail and upgrades to the London Underground network will continue.”

On the low-carbon economy:

“Businesses that have just signed up to the flagship Carbon Reduction Commitment energy efficiency scheme will be very let down by the Government’s unexpected announcement that it will remove the cash-back incentive. A scheme that was meant to change behaviour by encouraging energy efficiency has now become another stealth tax.

“By contrast, the commitment to clean coal technology, manufacturing off-shore wind turbines, and renewable heat and flood defences will boost private sector confidence in investing in low-carbon technology. Plans for a Green Investment Bank are also welcome, but the Government must get the design right to make it attractive to private investors.”

On apprenticeships:

“The 75,000 extra apprenticeships will help re-skill the UK’s workforce and adult apprenticeships are especially relevant for employers.”

On the science budget:

“We welcome the decision to freeze the overall science budget and the Government’s announcement that it will look for ways to improve how various funding streams operate.”

On public service reform:

“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.”

On public sector pensions

“We welcome the commitment of the coalition to tackle the spiralling cost of public sector pensions.

“Public sector pensions must be put onto a sustainable footing, with the full cost recognised and met by employers and employees together.”

On the rise in the state pension age:

“With people living longer lives, the welfare system must adapt. It is therefore right that the state pension age rises faster than planned to match improvements in life expectancy in recent years.”

On the bank levy:

“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.”

Notes to Editors:

The CBI is the UK's leading business organisation, speaking for some 240,000 businesses that together employ around a third of the private sector workforce. With offices across the UK as well as representation in Brussels, Washington, Beijing and Delhi the CBI communicates the British business voice around the world.
The CBI Annual Conference will take place on 25 October 2010 at the Grosvenor House on Park Lane. Media wishing to accredit, should follow this link: http://www.cbiannualconference.org.uk/media-info/press. You will need to upload a photo. The CBI Annual Conference always draws together exceptional leaders of business and politics. To access the day’s programme click here: http://www.cbiannualconference.org.uk/why-attend/2010-programme