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Chancellor must sort out deficit: Alexander

The head of the UK's biggest business group has urged the new Chancellor to concentrate on "sorting" the economic deficit, stressing that he should be "bold".

Helen Alexander, president of the CBI, said public services should be "re-engineered" to help tackle the huge deficit.

Addressing the CBI's annual dinner in London, with Chancellor George Osborne among the guests, she called for the relationship between the new government and business to be positive.

She stressed the role of business in helping the economy to recover and outlined the CBI's priorities as "a sustainable path back to fiscal health, a tax system that looks for growth and doesn't hit business, the right infrastructure and reform of our public services and public sector pensions".

Ms Alexander made it clear the CBI did not want any more business taxes, warning they would hit jobs, enterprise and growth.

Finding public sector savings was the "really difficult bit", said Ms Alexander, continuing: "What will make the difference is proper reform of our public services. Not tinkering, but radical re-engineering. Spending cuts can be a catalyst for long-overdue changes to supply chains, procurement and management. Most of us in business have already been through those changes. They simply had to happen, and they simply had to work."

She told hundreds of business leaders and politicians that education, health, policing and welfare could be achieved if there was "freedom to innovate".

With the Chancellor looking on, she said: "This is a call for more competition between providers, and for the best of all three sectors - public, voluntary and private - to be brought to bear. Except on schools, we didn't hear much from you on this in recent weeks, and we'd like to hear more. We want the Government's relationship with business to be a positive one. So I hope that business won't be a political football."