Last week George Osborne and David Laws announced where the first £6bn of public spending cuts will be made.

At present, exact detail of how the cuts will affect individual departments remains hazy and it appears that deeper cuts are soon to follow.

Tackling the deficit must remain the focus of the new Government. News that the euro zone debt crisis has spread across the Mediterranean from Greece to Spain, highlights the sheer urgency that is needed to fix public finances, and the Chamber welcomes the coalition’s rapid action in identifying savings. However, there is concern that the chancellor has gone beyond cuts based on waste and efficiency, as pledged in the election, as just under a third of savings will come from the delaying or termination of contracts and projects, which will undoubtedly hit the private sector. Over the next few months the Chamber will scrutinise the cuts carefully to ensure that investment that supports business growth and investment in infrastructure are not victims of the spending squeeze.

The new government must develop ways to help businesses save money and cut red tape. The latest Chamber Burdens Barometer (an annual review of UK regulation) shows that complying with red tape has cost UK business £88.3bn since 1998, which equates to £6.39bn in Yorkshire and Humber, alone. This is unacceptable in the current economic climate and a drain on time, money and resources. To date, the coalition has pledged a ‘one in, one out’ policy on new regulation, but whilst this will prevent the net amount of regulation increasing it does not go far enough to tackle the existing cost of red tape on businesses. This can only be addressed if the Government starts working in partnership with the private sector to identify what the cost of existing and incoming regulation is on businesses and develop sufficient plans to resolve this.

For more information on the Chamber’s representational activity please contact me on 01904 567838.