THE Chancellor's pre-Budget report pledge to slash red tape brought the loudest cheer from the region's business community.

Bureaucracy is the biggest scourge of modern business and so Gordon Brown promising to tackle 147 business regulations was a move warmly received.

Further efforts to invigorate enterprise and give tax breaks to new businesses also hit the mark.

While Mr Brown's words won the iron-clad hearts of most business people, he will have to deliver if he is to win their heads. George Cowcher, chief executive of the North East Chamber of Commerce, praised the pre-Budget report for being generally positive.

Mr Cowcher welcomed moves to amend or axe certain business regulations and also said efforts to promote enterprise and cutting one per cent off VAT for new business start-ups was helpful.

He said: "This is the first time a Government statement has acknowledged the regulatory burden on business.

"What was really disappointing and typical of this Government was the Chancellor looking to the regional development agencies for more plans to help business in the regions.

"At this stage that is laughable, given all the work done on regional economic strategies."

Peter Allan, chairman of the North-East branch of the Institute of Directors, said: "We welcome the moves to stimulate enterprise and the growth of small businesses.

"We appreciate that at last there is a growing reaction that over-regulation is stifling business and we are pleased to see that the Government is beginning to respond to our members' strong concerns about the red tape burden.

"However, the big issue is the Chancellor's economic forecasts. If his growth projections are not met he could be forced into imposing higher taxes which would be unwelcome and would have a serious negative effect on the economy."

Keith Proudfoot, regional manager for the Institute of Chartered Accountants, said: "It remains to be seen whether the Chancellor's measures to help bridge the funding gap for businesses will make any real difference to smaller firms requiring finance of up to £250,000, which is often where it is most needed."

Tony Cherry, policy chairman of the Yorkshire and Humber Federation of Small Businesses, said: "The FSB welcomes the intention to do away with 147 pieces of red tape but hopes this will actually happen as such announcements have not previously always been backed up with action."