Seven out of ten UK companies believe the changes announced in the Budget will not relieve the burden of red tape.

Just two out of ten thought Chancellor Gordon Brown's increase in the scope of tax allowances for research and development would encourage them to spend more on innovation.

Of 105 firms questioned by accountancy firm PricewaterhouseCoopers (PwC), 93 per cent said tax changes introduced during the Government's six-year tenure had increased the administrative burden on their business.

Despite Mr Brown's announced intention to cut red tape, 70 per cent of the firms surveyed said they thought the burden would remain the same.

PwC partner Keith Mansfield said: "Measures announced are targeted at the very smallest of companies and they will not ease the administrative burdens that medium and larger companies face."

The poor response to research tax allowances should prove to the Government they are not enough to stimulate spending.

Mr Brown said the Government would consult business to improve the definition of research which will qualify for tax allowances, to ensure that it kept pace with technological developments.