Insider Media Limited

As the dust settles on George Osborne’s 2011 Budget, business leaders from across the West Midlands have voiced their largely positive reaction to some of the surprise measures.

Birmingham Chamber of Commerce Group welcomed “an extremely positive step forward” with the announcement that two enterprise zones will be based in the West Midlands. However, the region’s manufacturing group, MAN, said it was sceptical about the introduction of the enterprise zones, noting that while they were free, foreign businesses would take advantage – but doubted this would continue once a charge was introduced.

Alongside his comments regarding enterprise zones, MAN Group chairman Gerry Dunne said that from a manufacturing point of view, there were positive elements to the Budget speech.

He said: “We certainly welcome the reduction in corporation tax and I’m sure all businesses will agree.

“The reduction in fuel duty is also welcome. However, we need to remember they only put it up last year by increasing the VAT up to 20 per cent. Similarly, the increase in the mileage allowance is a small help but it’s important to remember fuel has increased by about 35 per cent this year.

“The announcement about 12 new university technical colleges, increasing to 24, is also a step in the right direction. These are really what previously existed in the shape of polytechnics so it is effectively going back to what we had many years ago.”

Chris Romans, partner and tax expert at PwC in the Midlands agreed that “having been promised a Budget for growth, Midlands’ small businesses and entrepreneurs will be pleasantly surprised by many of the measures announced”.

He said that the government’s enterprise investment scheme would be a positive step for the region’s businesses.

"Red tape continues to be a major distraction for the region's businesses so the decision to relax the current rules and regulations for smaller businesses will help them to focus more of their efforts on growth,” said Romans.

As well as welcoming the enterprise zone announcement, the Birmingham Chamber Group said it was pleased to see the government introducing measures which will create an additional 40,000 more apprenticeships.

Angela Maxwell, managing director of Acuwomen, echoed the positive comments from the region’s businesses – but erred on the side of caution.

She said: “Reducing business regulation, tax reliefs and better than expected reductions in corporation tax are - on the surface - good news. I was also pleased to hear the launch of 'Start-up-Britain' announced, which will be dedicated to generating new businesses. As always, the devil will be in the detail with this new body, but one of its first jobs must be to ensure that there is investment available for new-starts.”

She added that West Midlands manufacturers would benefit from £100m investment in new science facilities, small company tax credits eventually rising to 225 per cent and help with capital expenditure.

“The fact that the green bank is going to launch earlier than expected will help us embrace the low carbon agenda, but the additional £2bn promised I fear is well short of what is actually needed to make us world leaders,” she said.

Turning to Osborne’s change to planning legislation, Gary Cardin, head of Drivers Jonas Deloitte's Birmingham office, described the relaxation of laws as “a well timed shot in the arm” for the Midlands economy.

He said: “The headline news that the default answer to development is 'yes' will help give comfort to developers and funders but how this statement is to be squared in the localism agenda remains uncertain. A return to planning by appeal will at least mean the current government should support sustainable development on brownfield land.”