Business Editor RON GODFREY examines the reaction of the business community in York and North Yorkshire.

THE business community of York and North and East Yorkshire ran the gamut of reactions from applause to scepticism over the Budget speech.

Andrew McBeath, spokesman for the York Property Forum of estate agents, surveyors, developers and other property professionals, described the Budget as "fairly innocuous and low-key".

He said: "I'm surprised that there was no stamp duty increase given that everyone is cautious about the way the property market is accelerating. I expected at least a marginal increase on higher-value seven-figure value residential homes."

On the Chancellor's plans to explore how there could be more long-term fixed-rate mortgages rather than the nearly two-thirds which are on variable rate, he said: "It's rational thinking, but how do you encourage and enforce it? When people don't have a large income, short-term rates are sometime the only answer."

David Harbourne, director of the North Yorkshire Learning and Skills Council, said that the Government's proposals to stimulate demand for advice on how improving skills can boost profits looked "very sensible".

He said: "Using existing channels of communication between High Street banks and their clients, businesses will get better information about the advice and support they can get from local business links.

"Most small businesses have their biggest communication with their bank, and if this is a source of yet more valuable advice, then we will be able to reach many more people with news about training and development."

Len Cruddas, chief executive of the York and North Yorkshire Chamber of Commerce, representing 600 businesses in the region, said: "There are positives like the extension of research and development tax breaks and increasing business start-up support, but these are nullified at a time when the rise in National Insurance contributions decreed in the last Budget take effect this week.

"He is in a difficult situation, because this is the second time he has downwardly revised growth figures. By sticking with his prediction of three to five per cent growth for 2004, it looks like he is just keeping his options open.

"His prediction of two to 2.5 per cent growth for this year seems more realistic and in fairness, with the present uncertainty in the world economy, he is probably sensible to wait and see.

"But there would be plenty who would predict a higher borrowing requirement than the £27 billion he foresees and the jury is out on whether he is right.

Two big problems face very small businesses - VAT thresholds being too low and the whole burden of red tape, particularly when it comes to employing people for the first time. Nothing has been done to reduce the cost of the regulatory burden which falls disproportionately hard on small businesses.

"If you have 1,000 employees of whom three go on parental leave, no problem, but if you have three employees and one of them goes on parental leave you're in difficulties," said Mr Cruddas.

Andrew Palmer, the CBI's deputy regional director for Yorkshire & Humber said: "The Chancellor has at last started to restore his business-friendly credentials."

In a difficult business climate with little room for manoeuvre, he had turned to more creative ways for improving the overall performance of the economy, especially productivity and investment, resisting the temptation to slap more taxes on business "which would have delivered a serious blow to confidence," he said.

Denis Kaye, deputy chairman of the 2,500-member Institute of Directors Yorkshire, said there were a number of positive initiatives, particularly the extension of 100 per cent capital allowances on investment in information technology.

Professor Tony Robards, chairman of York Science Park Innovation Centre, said: "There seem to be a number of points that would help small businesses, especially his announcement that he would extend the R and D tax credit scheme, but we have learned not to jump to conclusions with this Chancellor's Budget statements, but rather to wait for the detail as and when it becomes available."