Responding to the Chancellor’s March 2006 Budget, Bill Midgley, President of the British Chambers of Commerce (BCC), said:

“We took a message to the Chancellor that our businesses are facing serious global pressures. We think he has heard the message but are not convinced he has gone far enough.

 

“If we are going to compete globally, the most important thing is market flexibility – to achieve this we need low levels of regulation and high skills.  

 

“We are very pleased that the Chancellor has now committed to action on aligning national insurance and income tax. The British Chambers of Commerce has led the debate on simplifying the system and businesses across the country should be delighted.

 

“While the Chancellor has managed to achieve economic stability, businesses are facing increasing pressures which need to be tackled.

 

“We wanted to see a reduction in the overall regulatory burden which now stands at over £50bn since 1998, with targets and timescales announced for individual Government departments.  Employers are fed up with paying for Government regulation ,let alone the time they have to divert away from actually running their businesses.

 

“We also want to see better support for our existing exporters outlined in the plans for UK Trade and Investment. We have seen successive cuts in the export support budget at a time when the government wants us to focus on new emerging markets and Britain’s share of world exports is declining.

 

“We welcome various measures to boost skills in science and innovation, and review support for energy efficiency.  The BCC also welcomes measures to encourage innovation and enterprise, particularly the expansion of the R&D tax credit – although we would have liked to see it extended to cover firms’ expenditure on intellectual property.

 

"However this Budget has not addressed the serious concerns that public spending and borrowing remain too high - the Chancellor’s forecasts for public finances are too ambitious particularly beyond the next 1-2 years, even though today's figures signal a worse position for 2006/07 than in his Pre-Budget Report.

 

“The Chancellor's GDP growth forecast for 2006, is realistic and is in line with the 2.2% figure the BCC have predicted. But the Chancellor's growth forecasts for future years, at 2.75-3.25% for both 2007 and 2008 still appear to be unduly ambitious.

 

"Recent falls in employment and rises in unemployment highlight the fragility of the recent modest upturn, and the serious dangers facing British businesses. Given the low level of business confidence, the forecast of a strong recovery in business investment is difficult to justify.

 

“Businesses remain very concerned that excessive spending and borrowing may necessitate damaging tax increases in the near future.”