Heseltine told to bang public and private heads together

Eyebrows have been raised over Michael Heseltine's appointment (PA)

Big business loved it, small business less so, but most agreed that while the economy could benefit long term, the current low to zero growth isn't going to enjoy a quick pick up from the Budget.

And privately there were some raised eyebrows about the appointment of Michael Heseltine to look at how the public and private sectors can work better together.

The Tory party grandee has been handed the roll of reviewing how government spending departments and other public bodies can work with the private companies to boost economic development.

While George Osborne showered praise on the former president of the Board of Trade, saying "from Liverpool to Canary Wharf, Michael knows how it's done" some business leaders wondered how well he would work with business secretary Vince Cable.

Meanwhile the CBI said that the budget would provide "a much-needed confidence boost".

John Cridland, its director general, said: "The Chancellor has painted a clearer vision of how the UK will earn its living in the future and, by seizing the opportunity to make sure our corporate tax system is more internationally competitive, he has sent a powerful signal to companies to invest, do business and create jobs in the UK."

Mr Cridland also welcomed plans to cut the top rate of tax to 45 per cent which he claimed would "show our top and aspiring talent that this Government wants them to create wealth here".

However, even he said that things "may not feel very different on the ground" for small business and he was disappointed that "the currently unworkable carbon reduction commitment" wasn't scrapped.

John Walker, the national chairman of the Federation of Small Businesses, said he was happy with "some of the actions to cut the burden of red tape, help to get our young workers into employment, and measures to improve access to finance".

But he criticised what he described as the Budget's "missing link". This, he said, was "a small business administration – a department to champion small firms at the heart of government with a Cabinet-level minister".

He also said he remained concerned about all-time high petrol prices.

Meanwhile, despite the Chancellor's claims that he was taking seriously the need to rebalance the economy away from its over-reliance on financial services, manufacturers claimed that more needed to be done.

Terry Scuoler, the chief executive of EEF, the manufacturers' organisation said: "By the end of his [the Chancellor's] speech, the task of rebalancing our economy looked as daunting as ever. Whilst there are some helpful measures, they fail to send a strong enough signal to growing manufacturers that now is the time to bring forward their investment plans and to do it here. The corporation tax cut is welcome but, on its own, it is not the silver bullet that will unlock the business investment our economy urgently needs."