Reductions to corporation tax, the commitment to balancing the books and infrastructure investment were broadly welcomed across the business spectrum.
But changes to the way training will be funded and the commitment to effectively increase the minimum wage to living wage standards were highlighted as big concerns, as was the lack of concrete detail on how the North East would benefit from the Northern Powerhouse.
Jonathan Walker, head of policy and campaigns at the North East Chamber of Commerce, said: “Today’s Budget continues a clear direction of travel started by the Conservatives in the last government.
“However, it sees other parts of the country move ahead of the North East in securing a devolution settlement and we need to know why this is the case. It is of the utmost importance that the region makes significant progress in this area as soon as possible to avoid being left behind.
“The business community is united in its desire to see the North East prosper. We are therefore keen to explore all options that would enable a meaningful deal to be secured, including the possibility of an elected mayor. This deal must equip the North East with the necessary tools and responsibilities to shape its own economic future.”
The Chancellor appeared to take business by surprise by announcing moves for a new living wage of £9 an hour by 2020.
Mr Walker said: “The NECC encourages its members to reward their employees with a fair wage and believe any minimum wage levels should be established according to standards set by the Low Pay Commission.
“Our members will want assurances that the burden on smaller firms will be minimised, as any adjustment will hit them the most. We welcome the proposals to alleviate the impact through the tax system and urge the government to consider the views of small businesses when implementing this policy.”
The issue of pay was also highlighted as a concern by the Federation of Small Businesses, whose North East chairman Ted Salmon said: “The introduction of a new National Living Wage for over 25 year olds, set at £7.20 an hour from next April, will pose significant challenges for many small firms, particularly those in the hospitality, retail and social care sectors.
“We have been supportive of gradual increases in the National Minimum Wage in recent years, to reflect the improvement in the economy. However, we believe annual increases should be set according to the recommendations of the independent Low Pay Commission.
“We support the idea of giving employers a clearer indication of where minimum wages are heading in the medium term, but we note this move risks undermining the independent status of the Commission.”
Mr Osborne declared Britain “open for business” as he slashed the rate of corporation tax again in a boost to more than a million firms.
He said firms already pay the lowest rate of corporation tax in the G20 group of countries after a series of reductions have brought it down from 28% in 2010 to 20%, but said it will be cut again to 19% in 2017 and 18% in 2020.
The moves were given a broad welcome by businesses in the region.
Liz Mayes, North East region director at manufacturers’ organisation EEF said: “The Chancellor has served up a number of aces in supporting business investment allowances, plans to cut employer national insurance contributions, phased reductions in corporation tax and funding for road improvements.
“His commitment to defence funding is welcome and will encourage investment in key technologies. I also support the principle of establishing a new national living wage.
“However he has double faulted on the training levy which manufacturers will be sceptical about.
“Until we see the detail it is not clear how this will help deliver the high quality apprenticeships we urgently need.
“Employers must be in the driving seat on this reform to ensure we get the right quality of apprenticeships and training. There will be no tolerance for recreating the failed skills bureaucracy of the past.”
Gillian Marshall, chief executive of the Entrepreneurs’ Forum, the body that supports business owners in the North East, said: “The setting of the Enhanced Annual Investment Allowance at £200,000 on what the Chancellor described as a permanent basis is good news, not least because it allows businesses to plan their future investments.
“Coupled with the future plans for reductions in Corporation Tax to an 18% low in 2020 and investment in roads, this is good news for business and the economy.
“However, the lack of any reference to the North East in terms of progress on devolved powers was worrying and shows that we have catching up to do.”