The brunt of the tax burden should fall on consumers not businesses when the Chancellor delivers his Emergency Budget on Tuesday, says Birmingham Chamber of Commerce and Industry (BCI).

The BCI believes that business will not escape pain but endorses the need for George Osborne to cut the deficit. However, it warns that the Government must walk a tightrope if it is to avoid falling into a double dip recession.

Katie Teasdale, the BCI Head of Policy, said: "The Emergency Budget will lay out the challenges ahead as the Government tackles the structural deficit. 

"We hope it will provide a clear statement on the Government's plans for the UK tax regime- tackling the uncertainty which has arisen as a consequence of swirling rumours around Capital Gains Tax and VAT rises. 

"We are not expecting detail on the cuts to individual Government departments which will be dealt with in the autumn spending review. This will frustrate those private sector contractors sweating on the future of public sector contracts, in some instances even within this financial year. 

"Businesses do not expect to avoid pain on Tuesday. Even the current compromise on National Insurance Contributions will cost business between £2billion and £2.5billion in 2010/11. But businesses do need help if they are to deliver the growth that tackling the deficit relies upon." 

The BCI is urging the Government to outline an enterprise package in the Budget which will allow businesses in the West Midlands to create jobs and wealth. 

Ms Teasdale added: "Key to this is retaining investment in vital capital investment, like Birmingham New Street and High Speed Rail 2. Capital investment cuts are already scheduled to fall from £40bn this year to £23bn in 2014/15. 

"Cuts should be confined to programme spending, efficiency savings and waste. We also expect this to be accompanied by action to reduce the regulation burden on business. We'd urge the Government to avoid further rises in fuel duty, which is already too high and eating into business margins.

"The private sector must be spared any tax increases that would damage our global competitiveness. So the tax burden needs to fall on the shoulders of consumers. 

"A rise in VAT is probably a less-worse outcome for the economy than would be a rise in National Insurance Contributions and consequently we'd support the expected rise assuming it is accompanied by a thorough deficit-reduction plan which calms the markets. 

"Seventy-two per cent of our members are very concerned that changes to Capital Gains Tax will damage investor confidence. Should the Chancellor announce changes next week, they must be unambiguous with some form of taper relief and indexation. 

"The great majority of firms will welcome a lower corporation tax rate in place of capital allowances. However, we in the West Midlands benefit a great deal from niche manufacturers who rely very heavily on capital allowance breaks. 

"We are urging the Government to ensure that any measures announced next Tuesday do not have the unintended consequence of undermining British manufacturers. 

"We are calling for an immediate freeze in the overall public sector wage bill for at least two years, saving £8bn alone in 2010/11 as well as immediate public sector pensions reform. It is unacceptable to see final salary schemes open in the public sector when they are all but extinct in private industry. We would reiterate the concerns raised by the British Chambers that ring-fencing spend on health and overseas aid will result in deeper and more drastic cuts to important investment elsewhere."