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CBI chief calls for split in Treasury

Judy Jones,Peter Rodgers,Stephen Goodwin
Wednesday 09 December 1992 00:02 GMT
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THE TREASURY should be broken into two separate ministries as part of a national strategy to sweep away obstacles to economic recovery, Howard Davies, director-general of the CBI, said yesterday.

Speaking at a London meeting to discuss the Independent's Manifesto for National Recovery, he attacked the Treasury's 'negative culture', which flowed from public expenditure divisions into other branches of Whitehall activity.

Mr Davies agreed with speakers portraying the Treasury as the government agent that constantly blocked pleas for public spending on infrastructure and productive investment. 'That empire does need breaking up, opening up. The case for separating the Treasury (functions) into a ministry for economic growth, and a public spending ministry is a sensible one,' he said.

He added it was possible for government to take on a more interventionist, proactive role, despite its distaste for becoming involved in 'picking winners' in industry. On an independent central bank, he said: 'If we are moving towards Economic and Monetary Union, it will happen.'

The gathering for readers of the Independent, attended by business people, bankers, civil servants, economists, academics and local government leaders, heard several calls for higher taxes to fund investment in public services and

infrastructure.

There were also calls to focus housing resources on helping the homeless, as well as strong backing for an independent central bank to take monetary policy out of the hands of politicians. The most persistent theme was a perceived lack of political leadership and vision in the Cabinet.

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