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Industry and trade bodies praise increase in support for exporters

AN increase in support for exporters, a doubling of annual capital allowances and proposals to reduce energy bills were the Budget measures garnering the most praise from big business organisations and trade bodies.

David Watt, from the Institute of Director's Scotland, was particularly pleased the UK Export Finance scheme is being doubled in size to £3 billion while interest rates on it are also being cut to encourage more firms to participate.

He said: "Scotland has a poor export record with only 8% of companies currently trading abroad so we are hopeful that this may be the incentive needed to encourage companies to look more to overseas markets."

Alongside that the increase in the annual investment allowance (AIA) from £250,000 to £500,000 is expected to help encourage more businesses to bring forward investment plans.

Some 99.8% of all UK businesses are said to be eligible for up to £100,000 of immediate tax relief under that scheme though some had wanted the stimulus, which will revert back to £25,000 in 2015, to be made a permanent part of the economic landscape.

John Cridland, CBI director-general, said: "The doubling and extension of the AIA will be a shot in the arm for businesses ready to invest and drive the recovery."

There was also a complex package of energy measures, which includes offering compensation support to energy intensive manufacturers to improve their competitiveness against European counterparts, introduced which received a generally warm welcome from industry.

Bryan Buchan, chief executive of Scottish Engineering, said there were several measures his members would approve of.

He said: "Firstly the cut in interest rates to exporters and the extra £3 bn available for lending gives a boost to the growing number of Scottish engineering companies who are exporting worldwide. Secondly, the Chancellor's £7bn package to cut energy bills both for businesses and householders is a much needed stimulus.

"Further support will be supplied in the form of business rates discounts that will be extended for another three years. The investment allowance will be doubled to £500,000.

"All in all, the benefits for our sector from this Budget are considerable and I believe that the Chancellor has shown that the government is willing to help the one sector which has, throughout the recession, been able to maintain a level of growth and success."

That view was echoed by Dr Jillian MacBryde, director of knowledge exchange at Strathclyde Business School, who said: "The doubling of the annual investment allowance will allow companies, currently eyeing expansion, greater flexibility to plan for the future.

"Meanwhile proposals to reduce energy costs could also make a real difference and would help free up cash flow to reinvest back into British business."

Other measures likely to affect big business included a tax clampdown to ensure companies could not funnel profits into subsidiaries to avoid paying levies while £85m of funding is being made available across each of the next two years to support grand funding for apprenticeships.

The Chancellor also said a national centre will receive £42m in funding over the next five years to help the UK exploit big data possibilities.

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