Birmingham Chamber of Commerce and Ernst & Young Budget Event 2008

Birmingham Chamber of Commerce and Industry (BCI) said Alistair Darling still has a lot to do to prove he is a Chancellor for business.

The Chamber held a special Budget event at the Ernst & Young headquarters in Birmingham, allowing more than 60 representatives from the business community to watch the speech live before discussing its implications with the tax experts from the accountancy firm and business leaders from across the region.

For a summary of the Chancellor's announcements, please click here.

BCI head of policy Charlotte Ritchie said: “While, in some respects, the Chancellor was making the right noises about business, it might not make all that much difference in the long term.

“There was not a lot of substance to the rhetoric, and much of it was already announced in the pre-Budget report last year.

“The postponement of the fuel duty increase, if it was done as a response to the current economic climate, should be welcomed – but it was only a six-month postponement, with a further half-pence increase to be expected in 2010.

“We would rather he had scrapped it altogether, as rising fuel costs is one of the main burdens on business today.

“In other transport issues, it was disconcerting that there wasn’t a greater focus on investment in regional transport infrastructure. The news about CrossRail shows once again there is a London-bias when it comes to transport infrastructure investment when there are just as pressing issues across the country, especially here in the West Midlands, which is crying out for improved public transport.

“The fact that road pricing is also back on the agenda, just a week after it looked as if it had been shelved, is also confusing and seems like a contradiction.

“One of the reasons why the West Midlands decided not to back road pricing is because the technology is not in place. This latest initiative will also fail unless the investment is made first in how it will work.

“The reasoning behind road pricing is already established, but the question remains on how it will operate and how much will it affect businesses.”

She added: “The consultation to limit the amount of regulation on business is to be welcomed, but we have to look at how many schemes have been established in the past but never had any impact. Business will be sceptical at this new consultation and we want to see some real results this time.

“It needs to be accompanied by a top-to-bottom review of the existing legislation to remove any doubling up of legislation and those that have any unintended consequences or loop-holes.

“One positive thing to come out of the speech, the £60 million to get people back into the workforce is to be welcomed because a large proportion of the jobs available in the future will not be filled by those currently in employment so we need to look at those adults in jobs but will be able to re-train in the future. This investment is a step in the right direction and we hope further money will be made available in the future when the government realises what a pressing problem this is.”

Andrew Dale, tax partner at Ernst & Young added: “The general consensus in the room was that the speech was content-lite and the details will have to be digested over the coming days and weeks. However, the initial feeling is that there wasn’t a lot of change for business.

“The £60 million increase in small firms loans guarantee is to be welcomed, but that figure is a drop in the ocean compared to what is really needed. Anything that encourages entrepreneurs is a good thing, but they need proper support and decent tax breaks. The Capital Gains Tax changes that were already announced are as expected, but it leaves plenty more to be done to support UK entrepreneurs.

“In general, I don’t believe this budget will fundamentally change the competitiveness of the UK plc.”

Ms Ritchie added: “In retrospect, this may be dubbed the Green budget, with a number of announcements on the UK drastically reducing carbon emissions. We are pleased there was a focus on increasing in renewable energy generation and this needs to be matched with major investment in R&D for alternative energy supplies. It will, however, be crucial to ensure that our businesses are not put at a commercial disadvantage compared to their low-cost competitors around the world.”