Business leaders feared the Chancellor had gambled with the long-term success of the economy by promising a huge investment in the NHS, largely paid for from National Insurance.

Bill McCardle, policy manager of the Oxfordshire Chamber of Commerce, said the increases in National Insurance could dampen consumer spending -- a major factor in keeping the economy buoyant. He was also concerned about the impact on business confidence and investment.

He said: "Any increase in tax takes money away from business investment and has, historically, acted as a disincentive for both employers and employees." Meanwhile, small firms have been given a major boost with the introduction of a flat rate of VAT, the abolition of automatic fines for late payments imposed by Customs and Excise and the abolition of Corporation Tax for companies with profits of less than £10,000.

But Mike Rowe, managing director of Blue 2 Design in East Hendred, near Abingdon, said his firm, while small, failed to qualify for many of the benefits announced.

He said: "I don't see it as a Budget for enterprise."

Medium-size enterprise Nominet, based in Sandy Lane, Littlemore, said the Budget was unlikely to have a big impact on its business. Operations director Lesley Cowley said: "The hike in National Insurance will not discourage us from taking on more employees -- we are a growing company."

The Chancellor's decision not to increase stamp duty on house sales was welcomed by estate agent Miles Tuely, of FPD Savills in Oxford. He said: "It has been a slow start to the year and some people are hesitating about putting their homes on the market, so we are relieved."

Large biotech companies such as PowderJect and Oxford Glycosciences were disappointed that the Chancellor failed to extend tax breaks for research and development.