Increased Government spending, higher taxes and more Government borrowing are "cause for concern'' according to one of Bermuda's leading businessmen.

Glen Titterton, President and Chief Executive Officer of Bermuda insurer BF&M fired the warning shot in the BF&M annual report for 2000 and said that Government did not appear to be taking any steps to curb spending with a possible downturn in the economy looming from the US.

He said: "Increased spending by Government has brought about a need for increased taxation and increased Government borrowing. This is a cause for concern as there are no signs of Government taking the steps to control expenses in preparation for any downturn, which may result from a weakening US market.'' But he added that if Government and businesses continued to work together then Bermuda's success will continue.

In February's Budget Finance Minister Eugene Cox announced that Government had increased spending and borrowing sharply to continue its social programme of improvements in schools, health, housing and transport.

Motorists, smokers, drinkers, taxi drivers, cellular phone owners and air passengers leaving the Island were all hit by increased taxes.

Mr. Cox insisted that the taxes were fair because they were helping to lay the foundations for Bermudians to eventually compete for the top jobs in the economy.

Current account spending went up by 7.2 percent to $570.8 million, but with capital projects included the total spend is $683 million -- up from $619 million last year.

Borrowing shot up from $28 million last year to $50 million to finance Government spending plans.

Reaction to this year's Budget was mixed, with Shadow Finance Minister Grant Gibbons describing the extra spending as "irresponsible'' at a time when the economy was slowing, adding that "the little man will have to pay for these spending increases''.

Mr. Cox dismissed Dr. Gibbons' criticism as "arrant nonsense'', and said Government was confident of 2.7 percent growth in 2001-2 -- down from 2.9 percent predicted for 2001 -- even if there was a mild slowdown in the US economy.

Mr. Titterton's comments are the first public statement of concern by a Bermuda company on the financial direction of Bermuda.

But he ended his management report for 2000 in the BF&M annual report on a higher note.

Titterton voices concern He said: "We do believe, however, that if the partnership between Government and the business community continues to flourish, then balanced decisions will be made and Bermuda's success will continue.'' In the Chairman's report in the same publication, Lt. Col. Michael Darling said that the company was heading for success in the coming year.

"We are determined that, by combining innovation and creativity with financial strength and stability, your company will achieve the future success that comes to a market leader.'' BF&M reported net earnings of $10.8 million for 2000, after coming out of a difficult time in which it was involved in a highly publicised case which was settled out of court in 1999.

The company was hit by a bill for $41 million for the settlement and expenses of the case in which the shareholders were suing the Bermuda Fire and Marine management for their decision to split the company into two.

Since the settlement, trading was resumed on the Bermuda Stock Exchange and the price of shares has been going up steadily, and last traded at $12.50.

Glen Titterton