THERE was a lukewarm reaction to Gordon Brown's crowd-pleasing Budget from the region's businesses last night.

A Government assault on burgeoning red tape and stifling regulations, with the added bonus of a freeze on fuel duty and other tax, was welcomed.

But businesses remained sceptical as to whether the measures were a softener before the election, and whether they would be hit with more tax later this year.

Alan Hall, northern director of manufacturing organisation EEF, said: "I welcome this investment in education and skills, and also in the freeze on fuel tax.

"The increase in apprenticeships is also a good thing for manufacturers.

"What I would say is that I still believe the Government is going to end up increasing taxes this year.

"Things are slightly worse in the economy than Mr Brown has been portraying, and I think either business or the individual will be hit by tax rises later this year, probably through stealth taxes. But I do welcome the stability in the economy at the moment, which is a good thing for business."

George Cowcher, chief executive of the North-East Chamber of Commerce (NECC), said: "Finally, the message is hitting home that red tape is strangling business.

"But this was obviously a highly political Budget right before the election, and we have yet to see the details of the policies.

"NECC will play its part in efforts to simplify taxation and raise entrepreneurship as proposed in the Budget.

"The North-East will benefit from the announcement that Newcastle will host a new design centre to drive forward research and development.

"We will also lobby for this region's active participation in Mr Brown's aims to create a world-class stem cell research facility."