Hampshire businesses have welcomed changes to business tax but are divided over plans for a £9 per hour living wage

It was thumbs up when it came to slashing business and inheritance tax as well as changes paving the way for local powers over road spending.

But opinions differed on the biggest surprise of the day - the new living wage of £9 an hour by 2020.

George Osborne said at the end of his Budget speech that “Britain deserves a pay rise”, as he unveiled a new compulsory living wage, set well above the national minimum wage.

Working people aged 25 and over will receive it. It will start next April, at the rate of £7.20.

Business South chief executive Sally Thompson said: “His assertion that Britain deserves a pay rise will be endorsed by many.

“The headline grabbing National Living Wage of £9 by 2020 is good news for working people and on first viewing, it seems he has tried to mitigate the effect on businesses.”

But others such as Tim Walker, managing director of Fareham based Taylor Made Solutions, sounded a note of caution.

He said: “There is a sense of money being moved from one hand to the other.

“For example, a further cut in corporation tax will be welcomed by many companies, but that may be offset by the need to pay higher wages to over-25s.

“Likewise those people who benefit from the increased wages may well find they suffer from changes in tax credits – it’s a game of swings and roundabouts.”

But changes to tax were hailed by many as a boost for business.

Tim Forer, a partner in the employment team at Southampton law firm Blake Morgan, said: “Businesses will welcome small but significant measures such as further cuts to corporation tax to 18 per cent by 2020, and the rise in the annual investment allowance to £200,000 a year.

“Both encourage start-ups and smaller firms to grow and could encourage employment.”

The Chancellor also revealed that the inheritance tax threshold will rise to £1m for married couples by 2017.

Mihiri Gajraj, private client associate with Hampshire law firm Trethowans, said: “The introduction of an additional inheritance tax allowance for a person’s main home is a positive change.

“Many people worry that, on death, their house will have to be sold to pay the tax on it.

"The new allowance will reduce this risk allowing parents to pass their house on to the next or future generations.

“For those living in London and the south where, compared to the rest of the country, house prices are higher and rising quickly, this change is particularly welcome.”

Restricting tax relief on properties which are let is set to impact upon landlords in Hampshire. The county has a huge rental sector - while a generation is priced out of the market.

Claire Anderson, of Moore Blatch Solicitors, said: "The new rules however don’t come in until April 2017 giving landlords time to restructure their finances.

"The government estimates these cuts will result in them collecting extra tax of over £1.2billion over the next six years.

"This means potentially good news for house buyers, namely first time buyers, who are often outbid by landlords who help drive property prices up.

"Southampton is considered one of the best cities for landlords to invest, it will be interesting to see how big an impact this has in the longer term on the Southampton property market."

Another popular budget change was Mr Osborne's "new roads fund". Announcing this, he told MPs that in the last 25 years France has built more than two and a half thousand miles of motorway while Britain has built just 300.

Alan Rolfe, senior tax manager at HWB, one of the largest independent accountancy firms in the region, said businesses were desperate for investment in the road links.

He said: “Southampton has become a victim of its own success with the expansion of the port and local business.

“So we welcome the promise to invest in improving the road network using money from vehicle taxes.”

Maureen Frost, deputy chief executive of Hampshire Chamber of Commerce, praised a number of other business friendly measures.

She said: “These include the cuts in corporation tax, commitment to childcare, the new permanent annual investment allowance and, for some small businesses, lower national insurance contributions.

“The confirmation of 2 per cent of national income going to defence spending every year could safeguard jobs in areas with a large defence sector supply chain such as Portsmouth and Aldershot."

Mr Osborne also vowed to increase the number of apprenticeships in England to three million, starting in this Parliament.

Firms were told that control of funding would be put in their hands, although employers will have to contribute.

A levy will be introduced on large employers to fund the new training places, which ministers said will reverse a long term trend of under-investment which has seen the number of employees on a training course away from the workplace fall from 141,000 in 1995 to 18,000 last year.

Ms Frost said: “We also agree with the aim of creating more apprenticeships to address skills gaps in different industries though it remains to be seen what the impact of an apprenticeship levy on large businesses will mean in practice.

“We remain committed to encouraging all businesses to play their part in developing young people.”

But ending maintenance grants in favour of loans was not received well by those in the education sector.

City College Southampton principal Sarah Stannard said: “It is disappointing to see university maintenance grants for lower income students are to be scrapped.

“This could deter some very bright young people from Southampton from applying for university in the future.

"It is important for them to remember however that going to university isn’t the only way to get a higher education qualification and studying an HNC or HND at a local college may be a more cost effective solution for them.

“We have seen the number of young people studying higher education qualifications here at City College rise over recent years, in line with increased university tuition fees, so this could well rise again in coming years.”

Professor Alex Neill, Pro Vice-Chancellor (Education) at the University of Southampton, said: "The priority for our University will be to ensure that any change to the current maintenance grant system does not deter students from all backgrounds from applying to university.

"We currently provide a wide range of financial support for our students through generous fee waivers, bursaries and scholarships."