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Last Updated:  Wednesday, 9 April, 2003, 16:55 GMT 17:55 UK
Business cheered by tax freezes
Digby Jones of the CBI
The CBI's Digby Jones is worried about stamp duty
There has been a cautious welcome from business for Chancellor Gordon Brown's tax-freezing Budget but there is disappointment that he did not do more to help companies.

"The Chancellor has at last started to restore his business-friendly credentials," said Digby Jones, director general of the employers' organisation, the CBI.

But the Engineering Employers' Federation (EEF) said that, by failing to reduce taxes, Mr Brown did not go far enough.

"Manufacturers had low expectations from this Budget and were not surprised by the result," said Martin Temple, head of the EEF.

Companies in all sectors are still smarting from the increase in National Insurance contributions that have just come into effect.

Cutting red tape

George Granger, who runs a small engineering company in the chancellor's Fife constituency, described it as a neutral Budget.

For the larger business there was nothing
Rosalind Upton, Ernst & Young

"It was just freeze this, freeze that."

But Mr Brown did manage to address one of the biggest business gripes by saying that red tape would be reduced.

"One good point was cutting unnecessary regulation although I don't know what they're cutting," said Mr Granger.

He also welcomed the news that more firms would be eligible to borrow from the Small Firms Loan Guarantee scheme.

Euro disappointment

There was general praise for the plan to extend tax breaks for research and development.

It was described as a very welcome move by Rosalind Upton, tax partner, at Ernst & Young.

"We had the usual rhetoric about help to businesses and at least this time [the chancellor] seemed to be moving to meet small business's concerns.

"For the larger business, there was nothing," she said.

Neither was there any clear signal about the UK joining the euro.

Chris Middleton, managing director of Gripple, a manufacturing company, exports 85% of his goods and is keen for the UK to sign up to the single currency.

"Unfortunately there was no mention of the euro, it was very disappointing," he said.

Divided over growth

Changes in stamp duty are a big issue as far as both the CBI and the British Chambers of Commerce (BCC) are concerned.

Although stamp study on commercial property transactions has been frozen, there are proposed changes to stamp duty on rental leases for commercial property.

The CBI calculates that the stamp duty on a typical High Street business lease will more than double under the plan.

But the two business organisations were divided in their opinion of the chancellor's forecast that the economy will grow by 2-2.5% this year.

The CBI called it "realistic" but the BCC said it was "over-optimistic".




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