Chancellor makes pledges to help entrepreneurs.
In his Pre-Budget statement, he also announced help for manufacturers as well as encouragement for new companies aiming to launch exploration work in the North Sea.
Using a model of small business investment in the United States, Gordon Brown said the Government would create a new framework of incentives for small business investment and launch the first round of a new British fund for enterprise capital.
To encourage new companies to enter the North Sea, tax relief for their exploration costs will be enhanced.
Manufacturers and firms with turnovers up to pounds 22m will benefit from 40% capital allowances worth nearly pounds 400m over three years.
A review of manufacturing procurement rules was announced, headed by industrialist Alan Wood of Siemens, to make sure that British firms did not lose out from European rules unfairly applied to them.
A total of 147 deregulations were announced, including the removal of the need to have an independent audit for firms with turnover below pounds 5.6m.
The Government also set out further measures to help small businesses raise finance, through the launch next spring of a first round of enterprise capital funds, as well as changes to the research and development tax credits schemes.
Improvements were announced to the VAT flat rate scheme, including new lower rates and easier administration to make it more attractive to the 672,000 eligible businesses.
The Chancellor promised action to ensure that where regulations were necessary, they were 'comprehensible and simple', and announced new guidance for all new regulations to reduce the time that entrepreneurs spent establishing whether they applied to them.
Digby Jones, director general of the CBI, said, 'Firms will be relieved to see no nasty shocks in the shape of further increases in the business tax burden.
'Business will be pleased to see the Chancellor pushing further ahead with measures to boost innovation. Company investment in R&D is not as high as it could be, but we need serious government incentives to help turn that around.
'Today's announcement will help give a much-needed boost to development.'
Federation of Small Businesses Financial Affairs chairman, Neil Hamper, said, 'A number of these measures are already known to us and we would urge the Chancellor to introduce symmetry into the debate, by coupling economic stability with regulatory stability, as small firms are hardest hit by the cumulative impact of regulations.'
George Cox, director general of the Institute of Directors, said, 'We welcome the moves to stimulate enterprise and the growth of small businesses.
'We appreciate that at last there is a growing reaction that over-regulation is stifling business and we are pleased to see that the Government is beginning to respond to our members' strong concerns about the red tape burden.
'However, the big issue is the Chancellor's economic forecasts. If his growth projections are not met, he could be forced into imposing higher taxes, which would be unwelcome and would have a serious negative effect on the economy.'
Kevin Curran, general secretary of the GMB union, said, 'The move forward on procurement is crucial to the future of British manufacturing, because for far too long British workers have lost out as British contracts have gone elsewhere in Europe.
'We need to move to a situation where British companies are at the forefront of winning British and European contracts.'
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|Publication:||Western Mail (Cardiff, Wales)|
|Date:||Dec 11, 2003|
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