North responds positively to budget overtures

The British Chancellor's mid-term report, which highlighted a package of tax-cutting pledges and new measures to stimulate small firms' growth, will encourage business confidence, according to industry leaders in the North.

Mr Gordon Brown's commitment to maintaining public spending, with an added £1 billion sterling (€1.6 billion) boost for the National Health Service, is also likely to benefit the funding-challenged health system in Northern Ireland, according to business experts.

There were no pre-budget giveaways for Northern Ireland in Mr Brown's fifth report on the state of the UK economy.

The Chancellor, who is "cautiously optimistic" about the UK's future economic prosperity, presented a package of measures which he said would encourage new investment and reward entrepreneurship.

One of the most significant aspects for Northern Ireland is the abolition of stamp duty on homes and businesses worth up to £150,000, according to Mr Philip McDonagh, chief economist with PricewaterhouseCoopers in Belfast. "Gordon Brown has said stamp duty will be abolished in 2,000 disadvantaged wards throughout the UK - 236 of these will be in Northern Ireland so that should help encourage regeneration in these areas.

"Although there were no major surprises in this report, the Chancellor's belief that the economy will grow at 2.25 per cent this year is good news for businesses in Northern Ireland," Mr McDonagh said. He believes measures to stimulate small business and initiatives such as research and development tax credits for large firms will help improve the current climate for business growth in the North.

According to the Institute of Directors in Northern Ireland there are valuable changes signalled in the pre-budget report.

Chairman Mr Eric Bell said: "The acceleration of capital gains tax tapering for business assets is a valuable change but more sweeping changes are needed to produce a clean, modern tax system." Mr John Stringer, chief executive of the Northern Ireland Chamber of Commerce, said members hoped the benefits of proposals would flow through to the North.