Almost 100 leading figures from the region’s industrial and professional sectors took part in an interactive event gauging their views on the forthcoming emergency Budget and the Midlands’ place in the new world economy. Birmingham Post Editor Alun Thorne reports.

When George Osborne stands up in the Commons on the afternoon of June 22 it will be to deliver one of the most eagerly-anticipated Budgets for a generation.

After several months of increasingly alarming (some might argue alarmist) rhetoric about the state of the public finances there can be few in any doubt that Mr Osborne is planning the most radical review of taxes and public expenditure for decades. The question now is what taxes will go up and what expenditure will be cut?

These were just two of the questions put to some of the region’s highest profile business figures representing organisations such as Pertemps, Cobbetts, Deeley Group, HSBC, Metalrax and Hill & Smith to name but a few at a special event organised by BDO at the ICC in Birmingham.

The event – called ‘Transitions – Dealing with the Post Recession Landscape’ – saw the business leaders vote on a series of questions which were then debated by a panel including Richard Butler, chief exec of Caparo Vehicle Products Limited, Tom Lawton, head of manufacturing at BDO, and Tim Harford, FT columnist, Radio 4 presenter and award-winning author.

And while there was some consensus amongst those at the event, there was more than enough disagreement to suggest that Mr Osborne will have significant difficulty satisfying the disparate demands of the business community. One thing the guests did agree on was that the coalition’s aggressive stance in tackling the deficit as soon as possible was the right approach with 90 per cent backing the decision.

However, while most guests were in favour of immediate action to tackle the national debt, the majority (58 per cent) disagreed with the predicted ratio split of 80 per cent public spending cuts to 20 per cent tax rises.

Guests were asked to put themselves in George Osborne’s shoes and reveal what they would do in his position. A total of 80 per cent of them said that the biggest tax increase should be on VAT, with corporate tax increases unsurprising being least popular, with just 17 per cent saying they should be raised.

An overwhelming 94 per cent believed that local government was the first place to make cuts, with pay and pensions the next in the firing line with 80 per cent believing these should be reduced.

Commenting on the results, Mr Harford said: “First and foremost the Government has to reassure the markets- it’s not about being fast because what does fast actually mean?

“I don’t think taking major cuts from public sector budgets now is going to help things. I would rather see some immediate action with a clear strategy over the next few years laying out how the deficit can be reduced without causing too much damage to the economy.”

To watch more of the BDO Transitions event go to http://www.birminghampost.net/multimedia/news/

Mr Butler added: “David Cameron portrays someone who wants to grow the private sector and shrink the public sector, but I don’t imagine the cuts will be that big immediately. The Lib Dem influences on public sector cuts will be significant, the PM won’t be allowed to cut as hard and as deep as he would like.”

Results to the other questions posed during the event revealed that:

* 91 per cent felt that the new coalition Government is right to deliver bigger cuts in the short term to reduce the deficit.

* 54 per cent also believe that fixing the deficit sooner rather than later will not damage their business or their client’s businesses. 42 per cent felt that it would cause problems for their firm.

* 58 per cent felt that the predicted deficit fix strategy of 20 per cent tax increases and 80 per cent public spending cuts was unrealistic.

* 48 per cent revealed that if they were George Osborne their main priority would be to increase business competitiveness and growth, with 40 per cent stating that they would focus on cutting public spending.

* Most guests were confident that the new economic world order mostly represented an opportunity for Midlands businesses (70 per cent). While 16 per cent felt it was more of a threat and one in eight thought it would have little impact on their business.

* 65 per cent think the biggest risks of exporting to foreign markets are exchange rates, followed by cultural differences (22 per cent) and political instabilities (seven per cent).

The event is based on the Transitions report from BDO which warned that businesses need to transform themselves to adapt to a new world order that will emerge as economic performance improves.

If UK businesses are to survive, then reinventing themselves will be key within this period of profound societal and technological change. This will see some business models wither away and die, whilst others thrive and grow.

Considering the new economic world order, guest Bill Good of ECO-Logic, commented: “We can see the changes visibly happening.

“The population of China now wants the Spanish standard of living, their ability to save is incredible and their earning power is increasing.

“Over time, Chinese spending power will be huge and they will demand high-quality western goods, providing an opportunity for UK manufacturers to exploit an emerging market. There are more multi-millionaires in China than there are in the UK.

“Everyone wants to spend money and this is something we must make the most of in the next few years.”

Mr Harford added: “There are many opportunities that exist within a recession but it’s hard to say how businesses will take advantage of this transition phase, as each business is different and each person is looking at a different set of circumstances.

“I firmly believe that the Midlands can prosper from this recession but it will take proper leadership from those with vision and courage.”

Mr Lawton concluded: “It is fascinating to see how the economic power is moving from West to East and clearly there are both opportunities and threats as a result of these changes.

“However, it is more about how businesses react to these changes and deal with them, which will ultimately decide whether they become positive or negative factors.

“One thing is for sure, we will all need to adapt and develop to prosper. The world is moving on and so must we.”

To watch more of the BDO Transitions event go to http://www.birminghampost.net/multimedia/news/