A HIGHER minimum wage for people over 25 could see people taking home more in their monthly pay packet – but they may lose some of that with a cut in tax credits.

Those were some of the headline figures from Chancellor George Osborne’s budget delivered yesterday afternoon, the first exclusively Conservative budget in almost two decades.

He set out plans to cut the amount Britain borrows so that it runs a budget surplus by 2019, but found room for an inheritance tax cut allowing people to pass on a family home worth up to £1m tax-free.

Among the proposals was changing the rules regarding ‘non-dom’ tax status so anyone resident in the UK for more than 15 years of the past 20 years will have to pay full UK tax from April 2017.

The highest profile announcement was perhaps his plan to introduce a ‘living wage’ of £9 an hour by 2020. There will be a staged increase in the minimum wage for those over 25, rising from £6.50 to £7.20 next April. By the end of the parliament, the goal is that it will be set at 60 per cent of average earnings.

Benefits for working age people will be frozen for four years, including tax credits and housing allowance, but maternity pay and disability benefits will be excluded. People aged 18-21 claiming benefit will now have to ‘earn or learn’, with exemptions for vulnerable people promised.

Mr Osborne said he would increase funding for domestic abuse victims and women’s refuges and cut corporation tax cut from 20 per cent to 19 per cent in 2017 and 18 per cent by 2020.

Wales will receive a ‘funding floor’ (a minimum amount of money) each year from the UK government, he added, but did not explain how this would be calculated.

People buying a new car will have new tax bands for Vehicle Excise Duty, with most cars coming with a £140 standard charge.

Public sector workers will be restricted to a 1 per cent pay rise for the next four years.

At the moment, families earning below a certain threshold can claim back tax for each child they have but the Tories plan to limit this benefit to two children from 2017 (excluding people who have twins or triplets).

Gwent politicians gave a mixed response to the news.

Newport East Labour MP Jessica Morden said: “As always with this Government the devil is in the detail. As on previous form we know that they give with one hand and take away with another. It is breathtaking to hear the Chancellor start off by saying this is a budget for working families and then launch into a raid on tax credits hitting the thousands of working people in Newport East who rely on them to top up their wages. A family with one earner on average earnings will lose over £2,000 in tax credits from the changes announced today.”

David Davies, Tory MP for Monmouth, said: “I’m absolutely delighted with the budget. We can’t just go on borrowing money we don’t have ad infinitum or we’ll end up like Greece.” Referring to tax credit changes, he said: “It’s very expensive to bring children into the world and I think all people think about their income when they decide whether or not to have children. This is about making sure everyone does.” Asked about people who fall pregnant accidentally, he said: “By the third one people should have worked out what is causing it.”

But Wales Green Party leader and Malpas resident Pippa Bartolotti said: “If the budget was about working people, it was only about rich working people. You never want to be poor, young or disabled under a Tory government. Those on low incomes are going to be hit by tax credit cuts. Removing climate change levies [on cars] is going to be seen as very counterproductive in just a few years. This government has not taken climate change seriously and the road building programme just shows how little they understand. Wales is miles off hitting its climate targets.”

Newport East Labour AM John Griffiths said: “Anything that takes the living wage forward is useful but freezing working age benefits is worrying because a lot of people receive them in Wales. As well as the impact on people and their families directly, it also impacts spending in the local economy less money will be circulating. Reducing inheritance tax is completely wrongheaded and socially unjust.”

South Wales East Tory AM William Graham said: “All in all it was a very good budget. There are definite benefits in increasing tax thresholds and working towards a living wage. It’s good that student grants are now repayable loans, increasing the amount available to students. The Welsh Conservatives have long called for a floor in the Barnett formula - I will be very interested to see what [George Osborne] actually means by a ‘funding floor’.”

Former UKIP candidate for Torfaen Ken Beswick said: “My company has always paid above the minimum wage and going from £6.50 to £7.20 is not going to be a big deal for companies. Of course over the next five years inflation will start to creep up and that £9 in 2020 won’t be the same £9 as it is today; it will have been eroded.” Referring to an increase in defence spending, he said: “Thank god for that. If ever there was a time when Britain needed to keep up defence spending it’s now, and two per cent is not a large amount to ask.”

Lindsay Whittle, Plaid Cymru AM for South Wales East, said: “"The £12bn of cuts to social protection will cost the south-east Wales economy millions of pounds every year with tax credits cuts set to punish thousands of working families. Too many are struggling to make ends meet, whether they are the unemployed, disabled or in work. That’s why we have so many food banks. It’s a national disgrace and we need action to build a confident and prosperous economy in Wales.”

Welsh Government finance minister Jane Hutt tweeted: “A funding floor commitment is welcome – expect immediate action on this as part of the Spending Review. 1,200 claimants in Wales could be affected by changes to the entitlement of Housing benefit for 18-21 yr olds.

“Cautious welcome for National Living wage but unlikely to cover tax credit cuts. We have already delivered the Living wage for NHS staff in Wales. The widely reported cuts to welfare will have a hugely detrimental effect on the most vulnerable people in Wales.”

Tory AM for Monmouth Nick Ramsay said: “From frozen fuel duty to the Help to Buy ISA. From a guarantee on Welsh funding to a continued commitment on electrification; this is about recognising hard work in Wales and ensuring there is more money in peoples’ pockets.

“With confirmation of an additional eight billion for the NHS, Conservatives have again prioritised the NHS and we urge Welsh Labour to do the same and overturn their record-breaking health service cuts.”

Janet Jones, from the Federation of Small Businesses Wales, said: “There are some positive moves such as planned reductions in corporation tax and holding the annual investment allowance at £200,000 - something that will encourage small businesses to invest.

“We agree with the focus on productivity from the Chancellor and will be keen to see the details on the announcement to raise skills through the apprenticeship levy on large firms.

“However, some of our member businesses may find the Chancellor’s new National Living Wage challenging.”

Welsh Liberal Democrat spokesman Mark Williams MP said: “We wanted to see plans for a greener UK and policies to help people make the very best of their lives. Sadly, these were lacking from today’s budget. It is also worrying to see cuts on Child Tax Credits. These are cuts which liberal Democrats blocked in Government."

John Thomas who runs TaxAssist Accountants in Newport said that the budget delivered some "much-needed good news" for local businesses.