CBI welcome 'business friendly' Budget

The CBI has broadly welcomed yesterday's budget, saying that the Chancellor has "at last started to restore his business friendly credentials".

Measures such as the R&D tax credit, extended eligibility for enhanced capital allowances and the reformed small firms loan guarantee scheme drew particular praise as a "further step on the road to a real enterprise culture".

The CBI also voiced its approval on moves to cut red tape as a "positive move in the right direction", and saw the combination of fast-track planning approval and the prospect of enhanced capital allowances as providing a "big impact" on future development in deprived areas.

CBI Director-General Digby Jones said: "In a difficult business climate and with little room for manoeuvre, he has turned to more creative ways for improving the overall performance of the economy, especially productivity and investment.

"His economic forecasts are more in tune with reality and he has resisted the temptation to slap more taxes on business, which would have delivered a serious blow to confidence.

"The fly in the ointment is the threatened increase in stamp duty on leasehold commercial property, which could be devastating for some high-street businesses."

However there were areas for concern for the CBI – such as on stamp duty on commercial property.

Mr Jones said: "On a typical high-street business lease the stamp duty cost would more than double under the Chancellor's new proposals. Property leasing is not necessarily a tax avoidance measure, something the Treasury fails to recognise. For many sectors, in particular retailing and catering, it is integral to the way they do business."

(GMcG)