Business leaders and unions were by and large pleased with Chancellor Gordon Brown’s pre-Budget speech, praising its emphasis on enterprise, skills and getting people back into work.
Digby Jones, CBI director-general, argued the Chancellor’s desire to better equip workers was laudable.
"If we don't invest more in innovation and skills, as well as stimulate the success of small businesses, frankly we will get left behind by economies that have a much lower costs. The threat of China and India to our low-skilled jobs is only going to increase,” he said.
But he was concerned the emphasis on more family-friendly working could strain relations with employers.
The manufacturers’ organisation the EEF welcomed the measures to boost science and simplify red-tape, especially on business inspections and paper work.
The Chartered Institute of Personnel and Development also applauded the measures on skills, employment and childcare, but worried the Chancellor was being over-bullish in his forecasts for economic growth in 2005 and 2006.
Chief economist John Philpott said: “The Treasury assumes that there is ample scope to raise hours of work, boost hourly productivity and increase employment in 2005, thereby enabling the economy to grow by 3-3.5% without consumer price inflation rising above the target rate. This is highly debatable.”
The Institute of Directors welcomed the roll out of employer training pilots, agreeing with Brown that poor skills have held back UK business for too long.
The TUC, meanwhile, described the plans as “progressive” and argued the Chancellor was setting out his battle – and the Government’s - battle lines for the next General Election, expected on May 5.
General secretary Brendan Barber said: “There was strength in depth with detailed commitments to boost training and science.”
But plans to extend paid maternity leave from six to nine months and allow parents to transfer leave between mothers and fathers were been met with dismay by some business leaders.
Simon Sweetman, vice-chairman of the Federation of Small Businesses' taxation committee, said the proposals in Gordon Brown's pre-budget report had been made with a general election in mind, and "with little thought to the impact on small employers".
"All absence from work comes at a cost, and small firms are hit the hardest from the increases in costs associated with providing temporary cover," Sweetman said.
"The administration of maternity leave is already a headache for small firms, and the proposed transferability of maternity leave will make this worse."