CHANCELLOR Gordon Brown's tax-raising Budget has been broadly welcomed on the streets of South Lakeland.

It seemed most people were happy to pay more national insurance provided this would, as promised, lead to improved public services, reports Justin Hawkins.

However, Westmorland and Lonsdale's Conservative MP Tim Collins accused Gordon Brown of "giving with one hand and taking away with the other." For while firms stood to gain from various measures, including one per cent reduction in corporation tax for small businesses, Mr Collins said the benefit would be "more than wiped out by the national insurance increase."

He welcomed news of extra direct payments of £15,500 to "typical" senior schools and £5,550 to "typical" primary schools, but said Mr Brown had failed to tackle the underlying problem of a funding formula which disadvantaged rural schools.

He criticised the Budget for offering no real help to rural areas and said the NI increase would be a " body blow to struggling farming and tourism business in South Lakeland."

John Bateson, of the Westmorland and Lonsdale Labour Party, welcomed the promise of massive investment in the NHS saying the rise in NI was a necessary and fair way to pay for it.

Clearly pleased with the redistributive elements of Mr Brown's Budget, he particularly welcomed extra help for more working families through tax credits.

"It will benefit a lot of families in the area," he said.

Mr Bateson said the Chancellor had been careful to ensure recent budgets were kind to business and enterprise as the engines of prosperity and employment.

With this budget, he said, the chancellor had done more to help low income families and promote social justice.

"I think he got the balance right," said Mr Bateson.

Parts of the business community reacted angrily to the increased tax burden with the northern arm of the Engineering Employers Federation calling it: "The last thing manufacturers needed."

But Harry Knowles, Chief executive of Furness Enterprise, said: "I have heard relatively little reaction from the business community - they have certainly not been dancing in the streets, nor have they been crying into their handkerchiefs."

He said that for the area's small businesses the NI increase was likely to be balanced by the benefits of reduced corporation tax and other measures making it a neural budget for many.

But Mr Knowles said reaction to Wednesday's budget had been "muted," because Government had "managed expectation" by leaking news of the increase ahead of the Chancellor's statement.

Ian Bradley, managing director of the Coniston Brewery, welcomed news of a 50per cent cut in duty on beer from so-called micro breweries.

"It is definitely a helping hand, but won't make a world of difference," he said.

By the time the World Cup begins in June, the measure will make the brewery's best selling beer, Bluebird Bitter, around 12.5 pence a pint cheaper leaving the brewery.

Mr Bradley said it would basically be up to publicans how much of that benefit would be felt at the pumps.