Positive response to budget

The CBI has given a generally positive response to the Chancellor’s budget speech, but warned that Alastair Darling’s predictions about future economic growth are optimistic.

CBI director general, Richard Lambert, said that there were no nasty surprises. But the Chancellor’s growth assumptions were optimistic and it leaves him with no room for manoeuvre should things take a turn for the worse.

Borrowing also looks set to rise by a further £20 billion over the next four years, which is a cause for concern, he continued, and by 2010/11, the impact of this Budget will be to raise total tax take by nearly £1.9 billion.

The government has much to do if it is to win back its enterprise credentials, but the measures announced today are a credible first step on that road.

Although the anger over capital gains tax is still simmering, entrepreneurs and smaller businesses will recognise that the government has made an attempt to listen.

Lambert said although there may have been no further big shocks businesses mustn't lose sight of the whole raft of tax rises announced in the previous Budget and the Pre-Budget Report.

He added that these are scheduled to kick in from April, putting a further squeeze on firms at this already turbulent economic time.