Business leaders in the West Midlands today welcomed the government's commitment to finding savings through cuts rather than increased taxes following the Chancellor's swingeing Corporate Spending Review (CSR).

And Birmingham Chamber of Commerce Group (BCCG) said all interests in the region will be relieved that the improvements to Birmingham New Street Station, already under way, and the city extension to the Midland Metro will be preserved.

Katie Teasdale, the BCCG's head of policy, said: "We have to prioritise creating an internationally competitive taxation regime in the UK if business is to flourish here." 

However, she warned that the severity and the extent of the cuts will mean government departments making controversial cuts to many programmes.

She added: "Today gave us the headline figures. We will be waiting anxiously to see how 7.1 per cent cuts year-on-year in the Department for Business, Innovation and skills, for example,  will breakdown and the impact it will have on enterprise.

'Clearly the cuts announced today are severe and will impact across the board. Half a million job losses in the public sector between now and 2015 will have a significant effect on the private sector as will inevitable cutbacks in private sector contracts.

"We must now ensure that we all - business and government - have a laser beam focus on creating the conditions for growth which will help the private sector to pick up the slack and genuinely rebalance the economy. We must focus on international trade, infrastructure investment and creating the most competitive business environment in Europe which are vital to the success of UK plc. 

"However, we were pleased to note the positive noises around key services like UKTI and the emphasis on the Foreign Office supporting British trade. 

"The CSR has confirmed the government's commitment to expanding the freedoms and flexibilities on budgets and decision making of local authorities. 

"Most importantly, this will include Tax Increment Financing (TIF) for which the BCCG has been campaigning for some time because they will allow proper long-term infrastructure investment and the accompanying increase in business and employment.

"We welcome the Chancellor's commitment to making a further £0.5bn available for the Regional Growth Fund in its third year- which provides some certainty for businesses and local authorities who would bid into it. 

"Nonetheless the amount of funding being made available to support enterprise through the Department for Business will fall dramatically and the CSR has made clear that LEPs will operate in a very different financial environment to Regional Development Agencies. 

"Businesses will be disappointed not to have heard anymore about the Regional Growth Hubs in today's announcement. We urge the government to provide greater clarity about this area of policy in the near future as part of the anticipated sub-regional economic White Paper. It's key we avoid limbo at this point in the recovery cycle. 

"Improvements to Birmingham New Street are well underway and we are pleased this has been acknowledged as it will provide the city with a truly world class station.

"Confirmation regarding the extension of Midlands Metro is very much welcomed as it will bring massive benefits to the business community, and residents. Trams last ran through the city centre back in 1953 and this scheme will support the ongoing regeneration in central Birmingham. 

"High tech firms and innovators will be pleasantly surprised by the science budget outcome. The decision to freeze it in cash terms, rather than an outright cut, will help firms to innovate our way through this difficult period and will offer much-need support to the knowledge economy which will help balance the deficit. 

"The  boost  to adult apprenticeships by an extra 75,000 per year by the end of the spending period is a welcome boost to local employers who value their productivity."