CBI urges Osborne to cut middle class benefits and save investment in science, education and infrastructure

By Tim Montgomerie

The Financial Times reports (£) today's call from the Confederation of British Industry for Chancellor of the Exchequer, George Osborne, to cut benefits that go to the middle classes in order to protect investment in science, technology and transport infrastructure:

"Transport infrastructure, in particular, should be made a priority, the CBI says, because it offers high returns and will play a crucial role in boosting domestic and international trade. It wants work on the capital’s east-west Crossrail project and upgrades to London Underground to continue and says there is a strong case for improving the Thameslink commuter rail line."

Although the CBI supports Mr Osborne's deficit reduction plan it is concerned to minimise cuts in public sector capital investment, scheduled, notes the FT, to drop from 3.5% of national income to just 1.1%.

The Liberal Democrats and Iain Duncan Smith are also pressurising the Treasury to trim middle class welfare in order to finance changes to the benefit system that will 'make work pay'.

The Daily Mail reports that Nick Clegg, yesterday, "gave the strongest hint yet that next month’s spending review will involve a bonfire of middle class benefits to minimise the ‘unfair’ impact on the poorest." It writes:

"The Deputy Prime Minister, who earns £134,565 and is married to a high-flying City lawyer, said he would be happy to give up his family’s £2,450-a-year child benefit payments.  He said it was right that those who were ‘not so much in need’ should share the pain of the deficit reduction programme."