Jeremy Warner: Not much joy for business despite all the Chancellor's enterprising rhetoric

It could have been worse. For business, this was only a mildly negative Budget, which in the topsy-turvy world we live in today must be viewed as essentially good news. In the Chancellor's forced search for ever more inventive sources of revenue to fund his spending commitments, business usually receives a caning. This time around, it was only a slap over the wrists.

The Chancellor said he wouldn't be taxing flip flops - a reference to David Cameron's propensity to wear them and repeatedly to alter his policy position. Yet in terms of big-hit tax rises, the Budget has itself flip-flopped with its more junior partner, the Pre-Budget Report. December's PBR contained news of swingeing new tax hikes, particularly on North Sea oil.

Yesterday's Budget is, by contrast, fiscally positive for the first year - that is, there is slightly more money being put back into the economy than is being taken out. In the two years thereafter there is a mild tightening but, with the net effect at only £700m over the three-year sweep, business might reasonably think it's had a lucky escape.

I'm being ironic, of course. A Chancellor who is as good as his word in committing himself to the promotion of competitiveness and productivity of British business would be cutting taxes on employment and industry, not increasing them. As it is, what little tightening there might be as a result of yesterday's Budget is again at the expense of business.

Even long overdue measures to put Britain's property companies on the same footing as their European and US counterparts by allowing the creation of Real Estate Investment Trusts is, in truth, little more than a disguised tax raising initiative. The Treasury anticipates that the 2 per cent conversion fee will raise £155m in the first year. The property world escapes the Treasury's double taxation, but it is having to pay handsomely for its passport out.

Then there is the usual panoply of anti-tax avoidance measures, one of which seems to have been made retrospective for two years. A fair old slug of tax and national insurance that business thought would not be payable now has to be coughed up. Dig down into the 156 pages of detail in the "Budget Notes" if you can bear it, and there's plenty here to disappoint.

What the Chancellor gives with one hand, he takes away with the other. He's doubled the amount that can be invested through the enterprise investment scheme - which qualifies for 20 per cent tax relief - yet he's halved the size of qualifying companies, making investment of this type much more risky.

He's also reduced the tax break on venture capital trusts, and again reduced the size of qualifying companies. A tax regime which had achieved some success in encouraging investment in enterprise has become that much less accommodative.

The Chancellor won some plaudits from the Green lobby for a package of measures which, though about ten thousand light years away from what the Greens would have wished for, did at least appear to show good intentions. Or did it? The only measure of real substance - indexation of the climate change levy - is merely another form of business taxation.

As for differential excise duties to discourage gas-guzzling motorists, this really is fiddling while the world burns. The differentials are far too small to make an impact. Indeed, the higher-rate tax disc might even encourage the purchase of SUVs by acting as a status symbol. To the extent that the Budget is fiscally positive in the first year, the biggest beneficiary is, yes, the great British motorist, who gains from the freezing of fuel duty at the pumps.

The interesting thing is that the Chancellor could have got away with so much more - not on fuel duties, which are political dynamite with the oil price so high, but on climate change measures more generally. Nobody ever appreciates higher taxes, but to the extent that there is an appetite for them, or at least a resignation to them, it is in the field of global warming. This was a chance for the Chancellor to do something truly radical by applying the proceeds to tax cuts on employment and enterprise. He failed to take it.

In other respects too the Budget was a dull old affair. The big numbers on the economy and the public finances hardly changed at all. This in itself marks something of a turning of the tide for the Chancellor after five years in which he has repeatedly had to come to the dispatch box to admit that things were not quite so rosy for the public finances as he had anticipated. This time around, there is no further deterioration in either short or long-term projections.

And although the Chancellor sent out some powerful messages on what to expect from a Brown premiership - lots more money for education seems a pretty sound bet - there was little of real substance in what he had to say on future spending plans. An extra £34bn over five years of new investment on schools? I guess this is something not previously known about, but if it is genuinely new money, it doesn't show up in the projections of future capital spending, which are exactly the same as they were in the Pre-Budget Report.

Or perhaps he intends to finance it all through the private finance initiative. Like the Government's cavalier approach to public-sector pensions, this is just foisting the liability onto future generations. This steady build-up of long-term liabilities is a real cause for concern.

Wisely, Mr Brown has put no time scale at all on the ambition of raising the amount spent per pupil from the present £5,000 to the average of £8,000 seen at private schools. But, if he's serious, a whole new front in public spending commitments is about to be opened up. The 5 per cent real cut in the spending of four government departments announced yesterday won't fill the gap. So is that even more tax that business must resign itself to? You bet.

* Treasury Budget site

* Chancellor's Statement in full