We would have liked to have seen special measures today for sectors and regions that are most vulnerable.”Representatives of small businesses were less enthusiastic. The British Chambers of Commerce said moves to slash capital gains tax would boost business confidence in the short term, but voiced concern at proposals for a statutory right to time off for training.The Federation of Small Businesses said the proposed simplifications to the VAT regime could net businesses an annual saving exceeding the £1,000 forecast by the Chancellor. However, it voiced disappointment over the Chancellor’s refusal to cut taxes on energy and lend support to the haulage industry. David Evans, chief executive of the Retail Motor Industry Federation, said: “The investment in transport is paltry and woefully inadequate – a drop in the ocean compared to what is really needed.”There was also concern that the self-employed had been left behind.

The Institute of Chartered Accountants accused the Chancellor of forcing entrepreneurs to run the tax system rather than their own business. “This still leaves a complex tax system that small businesses struggle to operate. There appears to be no further progress in the Government’s ‘radical simplification’ of small business taxation,” it said.The Institute of Directors stated: “It would be better to have a simpler tax system, without special concessions, and to concentrate on reducing tax rates overall.”City economists said the spending commitments removed scope for further rate cuts by the Bank of England’s Monetary Policy Committee.Richard Iley, UK economist at ABN Amro, said: “The prospects for rate cuts are now very limited. If you believe the Chancellor’s growth forecasts, the MPC has done enough.”.

Four so-called “tax cuts for enterprise” were announced in response to widespread calls for a boost to business at a time of economic slowdown. But they welcomed the attempt to make the UK more competitive and attractive to investment.The key measures announced by Gordon Brown yesterday were:* Next year’s Budget will contain a new research and development tax credit for large companies to complement the one in place since April 2000 for companies with turnover of less than about £25m and fewer than 250 employees.* From next April, taper relief for Capital Gains Tax on business assets will be improved. The disposal of such assets – typically holdings in unquoted start-ups – will attract CGT at the rate of just 10 per cent if they have been held for more than two years rather than the previous four years, while a rate of 20 per cent will apply for assets held for one year rather than the previous three. These changes, said Mr Brown, would create a CGT regime “more favourable to enterprise than that of the United States”.* With immediate effect, the size of companies qualifying for the Enterprise Management Incentives scheme is being doubled, to gross assets of £30m. First, the Government published a long-awaited draft of the legislation due to be announced in next spring’s Budget on the “participation exemption”, which will relieve companies of CGT when selling shares in businesses in which they have been involved, such as subsidiaries.

Second, there were plans for a reform of the taxation of intangibles, such as intellectual property and goodwill.. Economic Forecast GraphicThe chancellor put his reputation for prudence and caution on the line when he forecast that the economy would escape almost unscathed from the worldwide recession. In the past, the economic forecasts have been a dull affair, but this year there was an unprecedented focus on the Treasury’s estimates for growth next year.The Chancellor did not disappoint. Almost all the big think tanks – the International Monetary Fund, the OECD and the European Commission – have revised GDP growth for 2002 down to around 1.7 per cent. Instead, the Chancellor forecast a range of 2.0 to 2.5 per cent compared with the Budget forecast of 2.25-2.75 per cent. The average City forecast is just 1.8 per cent.He appeared to take on his critics directly, saying: “While some pre-Budget representations claimed Britain was worst placed of any to withstand the global slowdown, the OECD and IMF have both forecast that Britain this year will have the highest growth of any of the G7 countries.” He said no country could withstand the shock to the global economy, and there were “real risks”. “But it is because of the decisive action we have taken on monetary and fiscal policy that I remain cautiously optimistic about the prospects for the British economy.”He repeatedly compared the UK’s performance with those of the United States, Germany and Japan, all of whom are in recession.