Budget 2012: CBI calls for 'targeted' tax cuts

The CBI is calling on the government to give a £500m boost to business in the Budget through a series of "targeted and modest" tax cuts.

In its submission ahead of the 21 March Budget, the business lobby group has urged the chancellor to deliver "Plan A plus" to bolster growth and investment.

It proposes a new tax cut for firms that invest in infrastructure projects.

The group also wants a simplification of taxes on carbon emissions and a lower rise in air passenger duty.

The CBI claims many businesses have the potential to grow and create new jobs, but confidence in the private sector remains weak.

"The chancellor must use this Budget to score the growth and investment policy goals he put forward in his Autumn Statement," said CBI director general John Cridland.

"With our economy firmly under the international spotlight, there is no time to lose: Plan A plus must become a reality.

'Not home and dry'

"We're calling on the government to make some targeted changes to the UK tax system, which could make an impact on business decisions and create new opportunities for growth."

The CBI also wants to ensure that existing policies set out in the Autumn Statement - such as credit easing, designed to make it easier for businesses to borrow - are fully delivered.

The shadow chancellor Ed Balls has called for tax cuts in the Budget, suggesting a cut to VAT and a 3p income tax cut for a year.

But Mr Cridland said he did not think Mr Balls' call for more significant tax cuts was affordable.

He said increasing borrowing by a further £12bn was not the right solution, particularly when the negative outlook for the UK's credit rating was a signal that the UK was not yet "home and dry".