Business Editor Amy Bould assesses local reaction to the Chancellor’s Pre-Budget Report.

Alistair Darling’s Pre-Budget Report was a series of small measures to help recovery in the short-term, but didn’t go far enough to address the financial “quagmire” facing the economy.

That was the view of several of Shropshire’s economic experts who assessed the announcements made yesterday by the Chancellor.

Commentators in the county were relieved that VAT was not going to increase but disappointed that the stamp duty holiday was not extended.

Tim Sutcliffe, of pi financial in Shrewsbury, said time would tell if the Chancellor’s “serious approach” would prove successful but added he was concerned how the country’s huge deficit will be repaid.

“He announced extra spending, a much vaunted tax on banker’s bonuses and a few anti-avoidance measures aimed at recovering some money. But more people will be concerned that spending will be hurt by letting VAT go back to 17.5 per cent on January 1 and the end of the stamp duty holiday will not help house buyers . . . it is unlikely to make any dent in the financial quagmire we find ourselves in.”

Nic Round, of Murray Round Wealth Management in Shrewsbury, said: “The problem is that the PBR is politically based for re-election rather than dealing with the big issues for the next five to ten years.

“The message to the bankers is populist. He wants the banks to say sorry, tax us more, and let us move on and we will do better.

“The banks need a slap on the wrist to help redirect their actions which hopefully means they stop focusing on the short term.”

Keith Winter, director of accountants Dyke Yaxley, said: “It’s good news that VAT isn’t going to go up, although it would have been a surprise if it did. I thought it could even have stayed at 15 per cent for longer. Irrespective of the pre-budget report, I think we are expecting 2010 to be a very tough year. I don’t see there being many short term improvements in the economy.”

Deferring the increase in corporation tax for smaller companies was hailed as an appropriate move.

Also cautiously welcomed was the announcement that the empty property relief which currently applies to property having a rateable value of less thanÊ£15,000 is to be extended, with the threshold to be increased to £18,000.

Ian Roberts, of commercial property agent Towler Shaw Roberts, said: “This has to be good, although nothing appears to have been done to simplify the rules that govern the process, and the application of this relief.

“There has in addition been no change to the rules that apply for temporary relief, where businesses have contracted because of the recession and this represents a missed opportunity.ÊÊ

“The devil as always is in the detail, which will no doubt mean continuing very careful treatment if rates liability is to be kept to the minimum allowed.”

Shropshire-based Carolyn Ling, associate partner with the St James’s Place Partnership, added: “The budget seems very much aimed at votes for the next election, no surprises there. The u-turn on increasing the Inheritance Tax threshold to £350,000 in 2010 is disappointing and in effect will increase the tax burden on an individual’s estate.

“Next year’s tax hikes for high earners has been well documented previously along with the reduction in tax relief on pension contributions.”

Laura Bradbeer, spokeswoman for HEFF, said local food and drink producers would be pleased that VAT will not be increased.

Companies would also be pleased that a 1p rise in corporation tax had been postponed. She said: “Naturally, given the tough economic conditions, any moves that help local businesses are welcome. We want our local companies to be competitive.”