Budget 2015: Challenges for business in Wales

Chancellor George Osborne (left) wants firms to boost productivity

The chancellor announced a series of measures that will have an impact on businesses and jobs in Wales.

They came broadly under the umbrella of tackling the UK's productivity problem.

The UK is behind other countries including Germany, the USA and France on this key measurement of the value of what we produce per hour worked.

And Wales is significantly behind the UK average.

Better productivity doesn't just benefit businesses - it increases wages and living standards.

The crucial issue involved in increasing productivity is investment - particularly in skills, equipment and infrastructure like roads.

The proposals are particularly relevant to the 75% of the working population of Wales who are employed in the private sector - around one million people.

Job creation

Reducing corporation tax should mean more money available for investment and to create jobs.

But just in case larger businesses have other ideas, there will be a new apprenticeship levy on them.

Those who invest in training their staff will get more out of it than they put in, according to the chancellor.

We'll need to see what impact this levy has on Wales where apprenticeships are devolved.

The new national living wage will be a challenge for many small businesses of which Wales has proportionally more than the rest of the UK.

However that might be mitigated by cuts in National Insurance contributions for small firms.

Ahead of the budget, business leaders had called for a re-think on the annual tax benefit for investment, due to be reduced to £25,000.

It's now being set at £200,000 permanently, which will particularly help small businesses in Wales wanting to buy new equipment to improve productivity.

The UK government has also committed to spend 2% of GDP on defence every year, rising to meet the NATO target.

That's good news for the Welsh defence industry and the 5,000 highly paid, highly skilled jobs it supports here.