Small firms helped to become e-firms

They said it would encourage small firms to go for expansion and lead to more office development in the county.

Mr Brown said a new small business service which will be launched next year would offer consultancy, advice and planning to help small firms "get online and become e-companies".

He said: "We are determined to lead in e-commerce and the Internet."

In a rapid-fire 51-minute Budget speech, Mr Brown pointed to healthy growth, continued low inflation, lower long-term interest rates and a ten per cent rise in living standards since he became Chancellor in 1997.

Oxford East MP Andrew Smith, who is Chief Secretary to the Treasury, said the Budget was "great news" for Oxford and would be warmly welcomed.

He added: "It gives a boost to the Health Service, to tackling child poverty, to support for pensioners, to improve transport and to combat crime.

"We are putting huge resources into health and education and building a better, stronger and fairer Britain. We are again cutting taxes for hard-working families."

Richard Venables, of property consultants FPD Savills, said the Budget would encourage speculative development in the county, particularly for smaller firms.

He said: "The county is well placed, subject to planning consents being granted, to become a more important hub for distribution. There are number of benefits in the Budget to encourage this business sector - and Oxfordshire could well increase as the focus of attention.

"There is also encouragement for more regional capital investment and the Regional Innovation Fund should benefit Oxfordshire, which is already set to have a cluster of such centres - at Heyford, Begbroke, Bicester, Banbury and Upper Rissington."

But Gill Perkins, spokesman for the Federation of Small Businesses in Oxfordshire, said the Budget was a lost opportunity.

She added: "The Chancellor said he wanted to create a fairer environment for enterprise, but he has sidelined over 80 per cent of small firms by ignoring the self-employed sector.

"Only a handful of businesses will be able to take advantage of the low rates of corporation tax and employee share ownership schemes."

"We had urged the Chancellor to boost the unincorporated sector by allowing them to retain some profits in their business, which would have benefited the majority of the small firms sector.

She added: "After three years of building up a £14bn war chest on the backs of taxpayers, entrepreneurs expected to see him offer them some reward.

"We had also called for a war on red tape, but the Chancellor has ignored this completely. The Working Families Tax Credit, due to start in April 2000, will seriously impact upon the smallest employers. There should also have been no increase in petrol at all."

Andy Corrigan, policy manager for the Thames Valley Chamber of Commerce and Industry which represents 700 companies in Oxfordshire employing more than 50,000 staff, said they welcomed the support for electronic commerce.

He said: "We particularly welcome the 100 per cent write-off against tax of all small companies' investment in e-commerce and new information technology.

"This will help drive the Thames Valley's small firms to engage in trade online."

He also welcomed tax credits for research and development which, he said, was a positive move.

But he said: "The chamber would have liked the Chancellor to extend the concept of investment tax credits to all early stage business investment."

Chamber chief executive Frank Stroud said that businesses had learned not to be fooled by headline announcements, but to wait for the small print before casting final judgement.

He said the chamber was also concerned that there was no direct action over red tape.

He said: "Our main disappointment is the Chancellor's failure to address the increasing burden small employers face as the Government's unpaid tax collectors.

"We welcome the announcement on new money for transport improvements, but we want to see where this money goes and how it will be spent. We will be putting a strong bid for infrastructure improvements in the Thames Valley."

The Chancellor said: "This Budget is built on the realities of this new economy - that we will meet and master a new tide of unprecedented technological change by continuing to remove the old barriers to business investment and by continuing to expand employment opportunity for hard-working families."

But Oxford West Liberal Democrat MP Evan Harris said the Chancellor had failed to deliver on schools, police, pensioners and hospitals.

He said: "Of course the extra money, particularly for the NHS, is welcome. But for Oxfordshire hospitals and patients this boost is far too late. This package does too little on police, schools and pensions - putting tax cuts first instead.

"The Chancellor did not even mention Rover and the problems the high pound is causing manufacturing and farming. If he continues to duck the issues of the euro and an overvalued sterling, Rover will just be the start of a calamity in British manufacturing."

David Fawcus, tax partner at accountants James & Cowper of Wantage, said it was an undramatic, modest, tax-tinkering Budget.

He said: "The changes to capital gains tax are welcome and will help stimulate business investment and the dotcom economy. Overall, though, it was a cautious Budget and the Chancellor could have been bolder."

The increase of 2p a litre on fuel would increase the average 10,000-mile-a-year driver's bill by £30.30, according to PHH Vehicle Management, but the AA said it was the first time motorists could take heart from a Budget in years.

Rebecca Rees of the AA spokesman for Oxfordshire, said: "His promise to freeze road tax is especially welcome. It shows that he has listened to our view that he has gained an extra £1bn in tax in the last 12 months from rising oil prices and that he didn't need to hit drivers again.

"That said, petrol will still rise 2p a litre, keeping pace with inflation, but with inflation so low it could have been worse."

She also welcomed the Chancellor's action to kick-start the ring-fenced road and transport fund with £280m.

Upmarket home buyers were hit as the Chancellor sought to dampen house price inflation without damaging the overall economy.

He raised stamp duty by half a per cent to three per cent on property sales above £250,000 and four per cent for sales above £500,000.

Sam Butler, joint senior partner of Oxfordshire estate agents Butler Sherborn, said the changes would take a little steam out of the property market but would have little effect on most people.

He said: "The increase of half a per cent to three per cent in the range between £250,000 and £500,000 and the half a per cent above that to four per cent will be absorbed without much effect, although it will concentrate vendors' minds on the prices they ask for their property where they are close to these band limits."

He said removing mortgage tax relief would only lead to a marginal increase in monthly mortgage payments.

At the same time he offered small investors a tax-free boost by raising to £7,000 the amount which can be invested in an Individual Savings Account next year.

For low-income families Mr Brown said that the Working Families Tax Credit would be increased from next April to guarantee a minimum family income of £214 a week.

Child benefit would be raised to £15.50 a week from next year with an additional £4.35 a week in support for the poorest children.

The new children's tax credit would be raised by £26 to £442, benefiting five million families.

Mr Brown said that it would leave next year's tax burden for the average working family at its lowest level since 1972.

Story date: Wednesday 22 March

Converted for the new archive on 30 June 2000. Some images and formatting may have been lost in the conversion.