A number of measures that should help both small and large bakery firms were announced in the 2011 Budget on Wednesday.

Corporation tax is to be cut by 2% in April, rather than 1% as previously planned, while there will be no new regulations on firms with fewer than 10 staff for three years.

Chancellor George Osborne also announced a number of measures to help halt the pressure of rising fuel prices. Fuel duty was to be cut by 1p per litre from 1800 GMT on Wednesday 23 March, and the planned 4p per litre rise due in April is to be delayed until 2012.

Melanie Leech, Food and Drink Federation, director general said the Chancellor had made a number of important announcements that were positive for the food and drink industry, and its potential for further growth.

“In particular we strongly support the decision to extend Climate Change Agreements to 2023 on which we have been lobbying the government in recent weeks. We also welcome the restoration of the Climate Change Levy discount on electricity to 80% from 2013.”

She said the FDF was also pleased to see the planned increases in fuel duty scrapped. “Food manufacturing is heavily dependent on fuel and any increase imposes an enormous burden on our members. Earlier this month, together with partner organisations, we wrote to the Chancellor to express our concerns about the rising fuel cost situation, and we are pleased that an increase will not now happen.”

The Chancellor, in what he called the “budget for growth”, downgraded the 2011 growth forecast from 2.1% to 1.7%, and the 2012 forecast from 2.6% to 2.5%. Inflation is set to remain between 4% and 5% in 2011, falling to 2.5% in 2012.

The Forum of Private Businesses said the government’s small business growth strategy is just a first step, and argued that tax and red tape plans should have gone further. It welcomed the short-term measures to boost enterprise, but said more must be done in the long-term if small businesses are to truly drive growth and job creation.

“It was important a Budget heralded as being pro-enterprise focused on easing the dual burdens of tax and red tape – two of the biggest barriers to business growth and job creation facing small businesses. In that sense, we weren’t disappointed and this was certainly more than just a nod in the direction of UK SMEs,” said the Forum’s chief executive, Phil Orford.

“However, while there have been some definite steps in the right direction the government could have gone further in reducing taxes and making the tax and regulatory systems more proportional to all small businesses so that they incentivise to entrepreneurship rather than act as a barrier to it.”

The Federation of Small Businesses echoed this view, stating that although it welcomed announcements in the Budget which will help provide stability, it didn’t go far enough to incentivise job creation.

“The biggest opportunity missing from this Budget is by not extending the NICs holiday nationwide to existing businesses, which would really have provided incentives for small firms to take on more staff,” commented national chairman, John Walker.

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