Throughout the Budget, the chancellor emphasised again and again that the government would not cut its way out of recession, and that investment in key services and areas would continue.

This was not news before the Budget – both government ministers and commentators were discussing this as the chosen route – but the big question was: how is the chancellor going to afford to it all?

It would appear that he is banking on two hopes – that the economy will bounce back (and how), and that the rich will wear his new 50 per cent income tax rate on earnings over £150,000.

The Budget was delivered against a gloomy background: the world economy contracting at the fastest rate since World War Two; company liquidations up by 23 per cent; unemployment at a new high of two million; and 75,000 home repossessions expected in 2009.

But, according to the chancellor, current gloom could be relatively short lived. He predicted that the economy will pick up again at the end of 2009, 1.25 per cent growth in 2010, and 3.5 per cent growth year-on-year from 2011.

Measures were announced to protect the employment market and encourage the long-term unemployed to return to work or enter training. An extra £1.7 billion has been pledged for employment support, and from January 2010 under-25s who have been out of work for more than six months will be offered a job or training, with benefits for those who choose the training route. Another £260 million has been earmarked for training in industry sectors with strong demand.

There was help for the property industry. The stamp duty holiday on properties valued at less than £175,000 has been extended to the end of the year and a further £80 million has been put aside for Home Buy Direct. There is £500 million to be made available to kick-start stalled housing projects, and another £50 million to improve armed forces housing stock around the UK. Local authorities will receive £100 million to build new energy-efficient homes.

The government clearly sees the future of British industry in emerging and environmental sectors, and measures announced in the Budget reflect this. More money will be made available to exploit North Sea oil and gas reserves, with further investment in the digital network; £750 million has been set aside for the Strategic Investment Fund, designed for industries in advanced manufacturing, communications and biotechnology. A further £525 million has been earmarked for major projects in renewable and low carbon energy, such as offshore wind farms. Such measures will prove popular with a growing number of South West businesses developing international reputations in these areas.

Businesses are also to be encouraged to invest with a doubling of the main capital allowance to 40 per cent for this year. The Budget also announced an extension to the rules for businesses wishing to reclaim tax on losses, which will now run for an extra year.

The chancellor was keen to emphasise that this was a Budget for people who need help now. The Child Tax Credit will increase by £20 a week, with an extra £100 contributed to disabled child trust funds.

Grandparents who are in work and look after their grandchildren will see that reflected in their state pensions and the winter fuel allowance will continue at the high rate – £250 for the over-60s and £400 for the over-80s. The basic state pension will be increased by 2.5 per cent regardless of the level of inflation.

Savers are also to be encouraged, with an increase in the tax-free limit for ISAs from £7,200 to £10,200, £5,100 of which can be saved in cash. This new limit will be made available to the over-50s this year and to everyone else from April 6, 2010.

With the exception of those earning more than £150,000 there are few losers in this Budget. For the south west there is good news – support for an ageing population, help for young people in areas of low employment, measures designed to help small businesses, investment for new emerging technologies and, given the high number of armed forces families in the region, much needed money for the improvement of their homes.

What remains to be seen is if the chancellor's economic forecasts come through, the anticipated bounce back at the end of the year takes place, and that all the government's best laid plans are not derailed by another global economic disaster.

Steve Collins is based at Francis Clark in Newton Abbot and can be contacted on 01626 206206. Francis Clark also has offices in Exeter, Plymouth, Salisbury, Taunton, Tavistock and Torquay. More information is available by logging on at http://www.francisclark.co.uk">www.francisclark.co.uk.