BUSINESS leaders in York and North and East Yorkshire today gave a cautious, but sceptical welcome to Chancellor Gordon Brown's pre-budget announcements, especially on plans to slash red tape and incentives for new ventures.

There was universal suspicion that his public spending will now lead to new increases in National Insurance or direct tax.

Len Cruddas, chief executive of the 800 member York and North Yorkshire Chamber of Commerce welcomed Gordon Brown's proposals to repeal or reform 147 regulations tying the hands of businesses.

But he said: "Actions speak louder than words. We will wait and see what actually happens rather than what he promises.

"We often hear about reductions in red tape, but we seem to get more rather than less."

Martin Hathaway, chief executive of Yorkshire and Humberside Chambers of Commerce, which operates the Yorkshire Forward-funded Red Tape Team of business bureaucracy-busters in the region, said he was encouraged by chancellor's plan announced yesterday to reduce the burden of legislation on small firms.

"A total of 81 per cent of the region's 162,592 businesses employ fewer than ten people and the chancellor's moves to make it easier for small and medium-sized businesses to claim tax relief on investment in new facilities and machinery' can only give a clear message that the Government encourages growth and prosperity.

"However, it could be seen that Mr Brown is only tinkering with tax incentives and not the 147 true red tape regulations as mentioned by the shadow chancellor Oliver Letwin.

"Overall this was a positive pre-Budget report for business, but we remain concerned that Mr Brown's fiscal policy and public spending may prove to increase taxes in the long run."

Denis Kaye, chairman of the Institute of Directors' Yorkshire region said: "The prudent Chancellor is turning into a gambler. He just made it this year when he predicted economic growth of between two per cent and 2.5 per cent and we've achieved 2.1 per cent.

"However, his predictions for 2004 and 2005 of 3.0 - 3.5 per cent are even more of a gamble and are dependent upon the rates of growth elsewhere in the global economy. Unless this happens we are going to have tax increases.

"At the IoD we would rather see greater control over public expenditure. However, we welcome the efforts to reduce red-tape although the measures that are being introduced hardly scratch the surface of the problem."

Updated: 13:05 Thursday, December 11, 2003