The Institute of Directors today claimed that the Comprehensive Spending Review would not be the "end of the world."

The organisation which represents bosses across the UK,
including more than 1,000 in Kent and Medway, condemned the
"negativity." It said that lower public spending could stimulate
growth, as it had in the past.

Chief economist Graeme Leach said: "It is not the end of the
world, far from it. We know this because of two important fiscal
lessons from the 1990s. First, between 1991 and 1997 public sector
employment fell by 600,000 - roughly on a par with the falls
projected as a result of the Spending Review - but this did
not prevent a sustained upturn in economic growth.

"Second, over the 1997-99 period fiscal tightening resulted in
public spending falling sharply as a proportion of GDP, but this
did not prevent the economy recording its fastest period of growth
over the past 20 years."

Mr Leach added that the public spending squeeze would not
automatically trigger a double-dip recession. "In the long term
spending cuts will be positive for economic growth," he added. "Tax
rises would damage the economy in both the short and long
term."