THE Chancellor's pre-budget report has received a cautious welcome from Worcester's business community.

Positive growth of 2.1 per cent for the country's economy was welcomed, but how will this benefit business?

"Obviously we welcome the strength of the economy," said Christopher Harvey from the Chamber of Commerce Herefordshire and Worcestershire.

"On a national level it's looking quite good, but at a local level it's not so good - there's a disparity - and it would appear Gordon Brown is undershooting in terms of revenue, which is significantly short by several billion.

"And this is because of a lack of joined-up thinking in terms of the regulatory framework, which is costing British business £20.5bn in compliance.

"We welcome the fact the Chancellor has not put up taxes but he needs to meet his expenditure and investment targets somehow. The lack of investment in public infrastructure is hampering business development - especially the transport infrastructure, which is a huge barrier to business growth."

Bob Michaelson, regional chairman of the Institute of Directors West Midlands, agreed it was always business that shouldered the burden.

"The pressure of balancing the books is continually foisted onto business," said Mr Michaelson, who lives in Malvern.

"He won't tax individuals because they're the voters but he taxes business time after time."

Robert Fearon, director of tax at Rabjohns Business & Tax Advisers, in College Yard, Worcester, agreed businesses should be wary, despite a few sweeteners.

"Local businesses will welcome the extension of the 40 per cent first-year allowance regime for plant and machinery to companies with turnover of up to £22m.

"However, what they actually need is a simplified tax system, not more regulation and bureaucracy. It will be interesting to see how the reform of some 147 regulations will impact on local business."

Simon Littlejohns, tax partner at PKF, which has an office in The Butts, Worcester, said smaller businesses were being "burdened", and that new Transfer Pricing rules - where companies must charge their UK subsidiaries the market rate for work - were "horrid".

"Similarly, the increase in child benefits is more for companies to have to think about."