CBI cautiously welcome Chancellor's pre-budget report

CBI Director-General Digby Jones has expressed concern about the business tax burden in what he described as a "positive" pre-budget report that he said had "little room for manoeuvre".

Commenting on today's pre-budget report, Mr Jones said: "This was a positive pre-Budget report for business, given there was little room for manoeuvre, but we remain concerned about the outlook for the public finances. Firms will be relieved to see no nasty shocks in the shape of further increases in the business tax burden."

He said that Mr Brown was "right to raise borrowing rather than go for spending cuts or tax increases" but he added that the medium-term outlook "remains a worry".

Business tax receipts were low, growth forecasts were optimistic, and the safety margin was fast disappearing, he warned.

"The tough message is that we have got to get more bang for every tax pound we are putting in to public services. Spending money is the easy bit, but it's getting service improvements that really counts."

Commenting on Mr Brown's proposed research and development tax credit, he said: "Business will be pleased to see the Chancellor pushing further ahead with measures to boost innovation. Company investment in R&D is not as high as it could be but we need serious government incentives to help turn that around. Today's announcement will help give a much-needed boost to development."

Turning to small firms, he said that businesses, particularly in the enterprise sector, would be delighted that the Chancellor is extending capital allowances and audit thresholds.

He also welcomed the intention to extend discounts on Climate Change Levy. Something the CBI has been campaigning for to help a beleaguered manufacturing industry.

(SP)