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Business leaders have offered a cautious welcome to measures outlined in Gordon Brown's 11th Budget today.

The chancellor unveiled a raft of initiatives aimed at industry, with the two per cent cut in corporation tax from April next year the headline figure.

Announcing the tax would fall from 30 to 28 per cent, Mr Brown also unveiled plans aimed specifically at small businesses and initiatives designed to get people back to work.

David Kern, economic adviser to the British Chambers of Commerce (BCC), said the Budget demonstrated "commendable strong growth and macro economic stability" adding the tax cut for business was "obviously welcomed, given the erosion in the UK's competitive position in recent years".

However, he stressed there remain "acute threats facing wealth-creating businesses" and picked up on the decision to raise corporation tax from 20p to 22p by 2009 for small businesses.

It was an issue also for the Federation of Small Businesses (FSB) which accused the chancellor of taking with one hand and giving with the other.

While FSB national chairman Carol Undy welcomed the cut in basic income tax she expressed her displeasure at the target on small firms.

"Small businesses employ 58 per cent of the private sector workforce - over 12 million people – and the increase in their tax rate fails to acknowledge their contribution," she commented.

Elsewhere David Frost, director-general of the BCC, said he was pleased at the increase in the compulsory school leaving age saying it would "benefit in ensuring that young people are given the skills and education that they and businesses need".

"The provision of a £2,000-£3,000 grant for small businesses to provide training for employees with basic skills needs is also something which we are in favour of," he added.

Retailers were also broadly encouraged by the announcement, with the British Retail Consortium (BRC) saying Mr Brown rated at eight out of ten for his Budget.

The BRC argued he could have gone further on reducing the business tax burden, but welcomed the "worthwhile reduction in corporation tax".

In addition the group was pleased with its role in the new local employment partnerships, which will see the BRC, Tesco, Sainsbury's, Asda and other leading retailers provide jobs for the long-term unemployed who succeed in work trials.

"This is an imaginative and practical scheme. It is not some abstract plan dreamt up by bureaucrats but builds on the help a number of major BRC members are already offering to enable people lacking the skills or self-confidence to get into the workforce more quickly," said the BRC director general Kevin Hawkins.