MINISTERS have been urged to focus on cutting unemployment and reducing red tape as the key to putting Britain on the road to recovery.

The call from the British Chambers of Commerce – backed by the Lockwood-based Mid Yorkshire chamber – follow shock figures showing a massive rise in public debt.

Public borrowing ballooned to a record £67.2bn in the nine months to January – threatening Chancellor Alistair Darling’s Pre-Budget forecasts of £78bn in borrowing for the year to April.

Net debt as a proportion of national output was supposed to stay below 40% under the Treasury’s former fiscal rules – but rocketed to 47.8% last month, the Office for National Statistics said.

David Kern, chief economist at the BCC, said: “These figures confirm the serious deterioration in Britain’s budgetary position.

“The long term implication is very significant and British business is concerned that curbing the deficit will require big tax increases in future years.

“To avoid damaging the economy’s recovery, the Government must prioritise its future actions and concentrate on measures that support employment and reduce the regulatory burden on companies.”

Steven Leigh, policy spokesman for the Mid Yorkshire chamber, said: “The worsening position with public finance has already been widely reported, and we do not wish to continually restate what everybody knows about the fragile state of the economy.

“However, we do wish to strongly reiterate the need for further action from Government to give the economy a boost.”

“The reduction in VAT is not having the desired effect and is regarded by many as ineffectual and a waste of taxpayers money to the tune of £12.5bn.

“Further measures are needed which will genuinely help to restore the belief that the government is able to manage the economy out of recession.”

Mr Leigh said: “There are numerous further initiatives which could have an immediate and beneficial impact.

“We are calling for an immediate reduction in NHI for employees and employers together with an increase in personal income tax allowances.