Budget 2013: Reaction - Big-ticket spending praised, but retailers bemoan rates rises

John Cridland: The CBI’s chief welcomed increased spending on infrastructure (Getty Images)

Businesses hailed the Chancellor's "confidence boosting" Budget but retailers warned of more woe on the high street with nothing to mitigate the forthcoming sharp rise in business rates.

John Cridland, the CBI's director-general, said the business lobby group had made it clear the Budget needed to deliver "a good dose of business and consumer confidence", while being fiscally neutral as the Government continues to grapple with the budget deficit.

Mr Cridland said: "We're particularly pleased our call for a focus on the short-term boost of housing has been heeded, alongside an increase in longer-term big-ticket infrastructure spending.

"This was recognition it was a mistake to cut capital spending so sharply and that other growth-boosting measures were taking too long. But by shifting £6bn to housing and infrastructure, the Government has sown the seeds for growth and jobs." He also hailed the extra penny off corporation tax as making the UK "one of the most internationally competitive locations in which to do business".

Measures to help small business drew a favourable response from him, while the Federation of Small Businesses said the Budget "opens the door for small businesses to grow and create jobs".

John Walker, the federation's national chairman, added: "The Chancellor has pulled out all the stops with a wide-ranging package of measures to support small business."

Mr Walker said the housing initiative would help "reinvigorate" the construction sector and the national insurance cut "goes beyond what we were asking for".

Manufacturers were also broadly positive, although with reservations. Terry Scuoler, the chief executive of the EEF, the manufacturers' trade body, said the Budget "contained some helpful measures on business taxation and, some signs of re-prioritising spending for growth".

However, he warned that it "still feels like a job half done".

Highlighting the £11bn underspend by government departments, he said this should have been used to "fire growth now, particularly through accelerating investment in infrastructure". He called for a shift in government spending "towards growth" in the forthcoming spending round.

Retailers were even less impressed. The British Retail Consortium's director general Helen Dickinson said: "This was the Chancellor's opportunity to maximise retailers' contribution to growth by keeping more money in customers' pockets and leaving retailers with more money they can invest.

"He's done well for hard-pressed households but could have done more to help retail businesses to help him deliver jobs and growth.

"Pressing on with a third successive business rates rise is very disappointing. Freezing rates would have made a real difference to our troubled high streets."

Retailers complain that high business rates are forcing them out of town centres and present huge advantages to their online competitors, many of which, like Amazon, pay little or no UK corporation tax.

Banks also found defenders in the City after the Chancellor announced plans to raise the banking levy so banks aren't able to benefit from the corporation tax cut.

Michael Wistow, the head of tax at the City law firm Berwin Leighton Paisner, said: "The Government is kicking the golden goose again with this spiteful and populist move against UK banks. Banks need to increase their capital to enable them to lend many multiples of it to kick-start the economy."