BUSINESS owners and managers crave stability. They need to understand the lie of the land so they can make informed decisions about the future direction of their companies.

The General Election result has left the business community in limbo for the next five weeks, as we await the emergency Budget announced by the Government.

It is understandable that a new governing party – or parties as we now have – would want to take stock before putting in place informed policies. However, the economic landscape is in turmoil and the sooner businesses can set about reducing the UK’s budgetary deficit, the better.

The North-East, possibly more than any other region, will be in pensive mood while we await the picture of the new Government’s plans to restore the economy.

Having such a large public sector spend in this region, we are particularly exposed to cutbacks. Both the Conservative and Liberal Democrat parties made no secret of their desire to find savings in this area, should they take power.

The North East Chamber of Commerce (NECC) would urge that the focus is on how to ensure the private sector is helped to flourish, so that any public sector savings are more than compensated by economic growth in the true driver of the economy – the businesses.

As such, David Cameron and Nick Clegg will need to be canny in how they tackle reducing the public sector spending burden.

They must recognise that there are vital areas of economic support that would severely damage this region were they to be withdrawn. Cuts are inevitable, but cuts in the wrong areas would be disastrous.

NECC launched, in its 2010 manifesto, the concept of an economic recovery test. Quite simply, any policy decisions affecting our region should be first tested to ensure they benefit economic growth, otherwise they should be avoided.

This applies to investment and cuts alike.

Last week, I wrote to David Cameron making this very point. My letter on behalf of NECC outlined the focused action needed in developing infrastructure for the benefit of economic growth in the region, improving the performance of the public sector in the North East and removing barriers to business growth.

I have repeatedly said that it is the businesses that create the jobs which reduces the burden of unemployment on the state; it is the businesses that have the ability to grow and, in turn, to increase revenues into Treasury coffers; and, it is the businesses that have the global reach to benefit from the faster economic upturn on foreign shores.

The Budget of June 22 will illustrate how clearly the two governing parties recognise this fact.

■ Martyn Pellew is the president of the North East Chamber of Commerce.