The Federation of Small Businesses (FSB) has given a mixed welcome to yesterday's budget plans announced by Finance Minister, Ian Pearson.

Monday's announcement saw a proposed £7 billion budget round for the next year with spending plans that will add an average of around £35 to the domestic rates bill.

FSB Policy Chair, Wilfred Mitchell said: “While we welcome the proposed cuts in electricity costs for small businesses, nowhere in this document does it mention High Insurance Costs as a priority for the Government.

“We would have hoped that given the thousands of jobs and businesses that are at risk with the Insurance Crisis, that the Government could have given some sort of help to small businesses that are unable to get insurance at any price in this budget”.

Mr Mitchell also expressed concern that the Government was using the Rates System to raise revenue to fund investment in infrastructure.

"For the longer term we would advise the Government to give a future Assembly, Income Tax Varying Powers on the same model as the Scottish Parliament, which would be a much fairer way to raise revenue," he said.

“However despite this, we are pleased that the Minister has taken on board our concerns about electricity costs and we hope that this is the start of greater reductions to come.”

Unveiling the government’s proposals for public services, investment, borrowing, and for the Regional Rate for Northern Ireland for the period 2004 to 2007, Mr Pearson said yesterday that health, education, and infrastructure were among the top priorities in a budget that has been based on a higher local contribution to fund increased spending.

Mr Pearson pointed out that the rates increase remained much lower than the comparable average annual Council Tax in England - £35 compared to £104, and alongside the rating of vacant non-domestic property, and the gradual introduction of rates to manufacturing premises, would ensure access to the borrowing needed to sustain "planned capital investment".

Infrastructure investment in public services, particularly in roads, water and sewerage will also be increased.

The Department for Regional Development will benefit from a 12% increase in 2004-2005 over 2003-2004.

The proposals also include £30 million, allocated from the DETI budget to reduce the cost of electricity.

Focusing on the industrial sector this funding will help promote sustainable growth in the economy.

(MB/SP)