BUSINESS leaders were disappointed by a Budget speech which was long on enterprise-friendly rhetoric, but seemed to be short of measures to provide much help to firms.

Representatives of large and small firms united in the view the chancellor missed a chance to give firms a significant boost with a big gesture like a cut in corporation tax rates.

Sir Digby Jones, CBI director-general, said: "The chancellor slapped himself on the back, but did little to give a helping hand to those hard-pressed businesses who are currently under the cosh. UK firms have watched while other countries have reduced business taxes to help their companies compete in this era of globalisation. Yet the UK continues to do the opposite."

The Budget was free of any nasty shocks on the scale of the increase in employers' National Insurance rates which took effect in April 2003. However, a sense that the chancellor had failed to understand the priorities of firms was exemplified for some by his decision to increase the climate change levy, which is applied to energy bills.

Andy Willox, Scottish policy convener of the Federation of Small Businesses, said: "Businesses are really struggling with the massive increases in energy prices and the last thing they need is an increase in the climate change levy, which will push bills up for high energy users, such as manufacturers and food processors. I know of one small baker which loses over GBP1300 a year as a result of this tax."

As many of the FSB's members are self-employed, moves to extend tax credits for research and development spending to limited companies employing between 250 and 300 staff, welcomed by the CBI, did little to mollify Mr Willox.

The Forum of Private Business welcomed the decision to raise first year capital allowance tax breaks on investment in plant and machinery to 50-per cent, but dismissed the overall effort as "lacklustre".

Jim Gorie, Scottish spokesman, noted that limited moves to stimulate investment in research at Westminster came as concerns mounted about what a widely reported financial crisis at Scottish Enterprise would mean for business support north of the border.

He warned that the chancellor's promises to cut red tape would be treated with scepticism by members, who had heard similar promises before. "Survey after survey has revealed that the greatest barriers to small business growth are tax and regulation, " he said.

At the other end of the spectrum, news that the government would launch a review of the tax administration systems and consult bigger businesses received a similarly guarded welcome from the CBI.

Sir Digby said: "Only a package that enhances the tax competitiveness of all business sectors and reduces the administrative cost will be sufficient to protect our economy's place in the global pecking order. Further uncertainty and change in the tax system, without that reduction, would make this a hollow gesture."