Bosses cautious over Brown's Budget

BUSINESS leaders in the East of England yesterday broadly welcomed Chancellor Gordon Brown's new focus on education and skills - but said his Budget had missed other opportunities to boost the competitiveness of British firms.

BUSINESS leaders in the East of England yesterday broadly welcomed Chancellor Gordon Brown's new focus on education and skills - but said his Budget had missed other opportunities to boost the competitiveness of British firms.

Suzy Carter, assistant regional director at the CBI, said: “We welcome extra spending on education, as long as it delivers improved results and young people with the necessary literacy and numeracy skills.

“Steps to reduce red tape, expand research and development tax credits and boost UK Trade & Investment have our wholehearted support but business will be disappointed that the opportunity truly to improve UK competitiveness has been lost.

“UK firms have watched while other countries have reduced business taxes to help their companies compete in this era of globalisation, yet the UK continues to do the opposite.

“It is vital that the Chancellor reins back on public sector expansion and the promised cuts are welcome, but simply redistributing money within a spiralling budget is not enough.”

She added: “The Chancellor slapped himself on the back but did little to give a helping hand to those hard-pressed businesses who are currently under the cosh.”

Clive Thomas, Suffolk branch chairman of the Institute of Directors, agreed. “For a lot of the time Gordon Brown was telling us what a great job he thought he had done over the last 10 years and it really did seem to me like him justifying his position as the next Prime Minister,” he said.

“Other than that there was not a huge amount of content; not a massive amount for the business community. The emphasis on education is good, but not to the exclusion of all else.”

Mr Thomas expressed concern about Mr Brown's growth forecasts, which he said sounded “a little bit optimistic”, and wondered whether he would have the money to carry out his education reforms.

However, the “big disappointment”, he said, was the lack of more concerted action from the Chancellor to reduce the burden of red tape - a particular issue for small and medium-sized businesses.

John Dugmore, chief executive of Suffolk Chamber of Commerce, agreed that there should have been more detail from the Chancellor on how his targets for reducing the burden of regulation were to be met, and said that, in general, it was “not exactly a Budget to set the world alight”.

Positives included better support for exporters in emerging economies, the prospect of a simplified structure for Income Tax and National Insurance and the range of measures to improve skills, innovation and entrepreneurship.

However, the Chancellor had failed to address serious concerns about the public finances and the high level of borrowing. “Gordon Brown's forecasts for public finance are too ambitious and my fear is that if he gets it wrong it could necessitate damaging tax increases for business, and that's not good news,” said Mr Dugmore.

Terry Taber, Essex regional organiser for the Federation of Small Businesses, said its members would welcome the absence of complex tax reforms from this year's Budget but said they would have liked to see some more positive measures for small firms.

“The Chancellor's statements on employer involvement in further education are welcome,” said Mr Taber. “Small businesses need employees that have basic levels of education as well as valuable business skills. It remains to be seen whether the contents of the Budget speech are actually translated into practical improvements in skill levels.”