THE region's development agency claims thousands of firms will benefit from the proposals in Chancellor Gordon Brown's pre-budget speech.

Advantage West Midlands, which is responsible for improving the economy of Herefordshire and Worcestershire, claims the extension of tax credits for research and development will boost companies greatly.

The agency is working to develop three high-technology corridors in the region, including the Worcester to Birmingham corridor, taking in the Malvern Hills Science Park.

Bill Jones, press spokesman for AWM, said the tax credits proposed in Tuesday's speech would help increase investment in the region.

"We have been pressing the Government for some time to encourage research and development because it is through innovation and enterprise that businesses create wealth," said Mr Jones.

"The research and development tax credits announced by Gordon Brown will mean increased investment in the area's technology base, especially in places like the Malvern Science Park."

Mr Jones said the money for the corridors - £40 million for the three - had been released by the Government and that work was in hand to create them and an environment attractive to companies.

"We are talking to companies and encouraging them to build links with universities and science parks, such as the one in Malvern," said Mr Jones.

"We are talking to them about the potential for networking with other like-minded companies who may share the same suppliers or markets, or who could work with each other in some way."

The agency also believes the removal of stamp duty on properties in regeneration zones - including the area around Rainbow Hill and Brickfields in Worcester - would encourage much-needed redevelopment on brownfield sites.

"In the past, redeveloping brownfield sites has not been attractive because of stamp duty so people moved out and built on greenfield sites, which was the cheaper alternative," he said.

"But now redeveloping a brownfield site - such as an old factory or coal mine, for example - is a more attractive proposition."

He said the axing of stamp duty would also help the plans to regenerate market towns, as well as helping farmers who wanted to convert disused farm buildings into commercial letting property.