THERE was a muted response today from Lancashire business leaders to Gordon Brown's budget proposals to boost the local economy.

Mike Damms, chief executive of the East Lancashire Chamber of Commerce described the Chancellor's announcement as "neutral in the extreme".

While welcoming a raft of proposals to support the growth of small companies, he warned that businesses would need to examine the small print of the budget.

"As usual, the devil is going to be in the detail," he said. "The real damage to employers was done in last year's budget when Gordon Brown increased National Insurance contributions which have only just come into effect this month.

"We were not expecting any headline statements for business and industry and he hasn't disappointed."

Mr Damms was pleased to see measures designed to encourage the growth of small and medium-sized businesses, such as the proposed new investment companies willing to invest between £250,000 and £1 million.

He was also happy to see a relaxation of VAT and audit rules for smaller firms and a freeze on excise duty for lorries which he said would help transport companies compete in international markets.

But he remains concerned at the long-term prospects for the economy.

"His economic forecasts for this year were wrong and he has placed great store on a recovery next year." he added. "That is where he is taking a major risk."

The Chancellor's budget was described as "all talk and no action" by the Forum of Private Business (FPB) which has a strong smaller business membership in the county.

"The Budget sounded good, but we heard little that was new," said Nick Goulding, FPB chief executive.

"This was essentially a defensive budget which offered some consolidation for businesses, recognised some concerns, and encouraged new technology and skills development.

"But overall, it does not excite and it will not make any real difference to our members in the short run.

"There was very little in the Budget to help our members grow their businesses."