Regional CBI Director indicates mixed response to Budget

CBI Northern Ireland Director Nigel Smyth has said the local business community will be disappointed with some of Chancellor Gordon Brown's Budget statement on Wednesday April 17.

Mr Smyth said Northern Ireland businesses would be bitterly disappointed by the Budget's sting in the tail with the proposal to increase employer's National Insurance by one per cent from April 2003.

He added: "This is a tax on employment and comes at a time when companies are operating in intensely competitive markets and profitability is under pressure. This will be a significant cost to business and with one in four companies in Northern Ireland not profitable this is a particularly unwelcome announcement.

"However, there are a number of welcome proposals to encourage innovation in large companies, to assist small companies with training, reduced taxation, and measures to reduce the administrative burdens. But in many cases these welcome benefits will be outweighed by the increased cost of employing staff.

"Northern Ireland is also likely to benefit from the significant increases in public expenditure. However it is vital that, as in the rest of the UK, reform goes hand in hand with increased expenditure. We must ensure that the additional expenditure is spent wisely and effectively."

However, Mr Smyth said that Northern Ireland should particularly benefit from the Chancellor's focus on improving family support and additional measures to support welfare to work. Measures announced in both these areas should improve the incentives to work and help the Northern Ireland labour market, he concluded.

(MB)