Business groups give Budget cool reception

Chancellor Alistair Darling announced a number of measures to help struggling firms and the unemployed in today's Budget, but could not escape widespread criticism from small business groups.

The chancellor extended the relief that allows loss-making companies to reclaim taxes on profits made in the last three years until November 2010.

He also confirmed a state-guaranteed trade credit insurance scheme, under which the Government will make up the difference in private sector cover where an insurer has reduced cover to a UK business.

Under-25s who have been unemployed for 12 months or more can expect a job, training or work placement, and there will be an increase in statutory redundancy pay from £350 to £380 a week.

And the single most expensive part of the Budget looks likely to be the temporary increase of the rate of capital expenditure tax relief to 40% - predicted to cost the Treasury £1.64 billion.

The announcements have had a mixed reception from business groups, with the Federation of Small Businesses (FSB) saying the budget had "largely ignored" small firms.

Meanwhile, the Forum of Private Business lamented a 'missed opportunity'.

"While some of these measures will benefit low-carbon companies and new technology start-ups, they will do little to restore business and consumer confidence and stimulate economic activity," said chief executive Phil Orford.

And although welcoming "micro measures" such as the trade credit insurance and scrappage schemes, the CBI questioned the chancellor's public finance plans, dismissing his economic forecasts as "optimistic".