Gordon Brown's budget could boost agency breakaways and start-ups

- The number of agency breakaways and start-ups could be boosted by the extra help being given to risk-taking entrepreneurs in Gordon Brown's budget.

- The number of agency breakaways and start-ups could be boosted by the extra help being given to risk-taking entrepreneurs in Gordon Brown's budget.

New tax breaks, cuts in corporation tax for small businesses and help with the introduction of hi-tech facilities may lead to a new wave of agency executives prepared to go it alone, some industry observers believe.

Richard Hytner, the Publicis chief executive, said: "The budget could certainly encourage some breakaways. The time for small businesses appears to have come."

Nick Phillips, the director general of the Institute of Practitioners in Advertising, said the consolidation of more client business --particularly at international level -- mitigated against agency start-ups. But he added: "At the other end of the market there is always room for niche players --and Brown's budget could help them."

Meanwhile, senior industry figures believe that, although the budget is a fairly neutral one, it has helped sustain consumer confidence and lessened the threats of cuts in adspends.

William Eccleshare, the Ammirati Puris Lintas chairman, said: "I suspect it will boost consumer confidence and will stop us talking ourselves into recession. Three months ago we thought it was going to be a tough year. Now, in many of our businesses, we see no signs of panic."

"It's been a 'steady-as-you-go" budget which is what the economy needed," Michael Bungey, the Bates Worldwide chairman, said. "It should see people through any downturn in the economy. I don't see any downside to it."

Some senior executives believe the chancellor's new tax credits will have a healthy impact on the ad budgets of major retailers. Meanwhile, the 17.5 p price rise on a packet of cigarettes is not thought likely to effect promotional budgets of tobacco manufacturers already under pressure from upcoming legislation.

Graham Hinton, the Bates Dorland chairman and IPA president, said: "I really don't think the budget will make much difference. It seems to be giving with one hand and taking away with the other."





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