The rise in VAT will see more people hitting the shops in the short-term.

That’s the prediction from Beales chief executive Tony Brown, who says that the increase in VAT to 20 per cent will stimulate shoppers to buy now. “It will boost sales between now and January because of people getting in before the rise,” Mr Brown said.

“I think the increase should take place after that time because it’s January sales time and it’s complicated to re-price reduced stock. The VAT increase was inevitable.”

He added: “He could’ve been tougher on VAT – I think he should have levied it on luxury foods.

“Thank God the Tories are back in. We can go forward with some degree of certainty.”

Nigel Hedges, president of Bournemouth Chamber of Trade said: “It was not as painful for businesses as it could’ve been. We had all prepared ourselves to suffer some pain for the national good. A florist has said that the VAT rise will result in one less bloom in a bouquet. It will make traders sharpen up their act. We have to get people back in the shops,” said Mr Hedges.

The Budget got a “thumbs up” from David Skillicorn, managing director of Palmair, the Bournemouth holiday operator. “I am relieved that the idea of scrapping air passenger duty and replacing it with a charge per plane irrespective of how many are on it has gone out the window and low cost carriers will be relieved too,” he said, adding that Palmair won’t be affected by the changes that look set to be implemented in November because it operates “under the 2,000 nautical miles threshold”.

“The VAT rise has an accountancy implication in terms of the things we buy in and accounting rather than a cost,” he concluded.

Annette Brooke, Liberal Democrat MP for Mid Dorset and North Poole, said while there were parts of the budget she didn’t like, overall “a balance has been achieved”.

On the rise in VAT to 20 per cent from January 4, she said: “Of course I’ve got concerns that it will affect people on lower income more than those on higher income, but tough choices had to be made.

“It’s a matter of getting balance. To counter that the income tax threshold is being raised – this is something I’m absolutely delighted about.”

South Dorset’s new Conservative MP Richard Drax said: “The emergency budget is entirely the legacy of the previous Labour government.

“The proposed reform of the welfare state, which now costs the country £192 billion a year, is long overdue.

“Savings across most departments will be found in spending cuts, rather than tax rises, which must be right. We must live within our means.

“The rise in VAT to 20 per cent is regrettable but necessary. And I welcome once again linking the state pension to earnings.”

Budget at a glance

• Council tax freeze for one year.

• Earnings link for pensions restored. The pension will rise in line with earnings, prices or 2.5 per cent, whichever is the greater.

• Public sector pay freeze for staff on more than £21,000 for two years. Those on less get flat £250 increase. Public sector pension reform is being reviewed.

• From next year – with the exception of the state pension and pension credit – benefits, tax credits and public service pensions will rise in line with consumer prices rather than retail prices, saving over £6bn.

• VAT increase from 17.5 to 20 per cent from January.

• Health in pregnancy grant abolished from April 2011. The Sure Start maternity grant to the first child only.

• Welfare benefits cuts of £11bn. Child benefit frozen for three years. New medical assessments for disability benefits. Baby element of child tax credit scrapped. £400 a week maximum limit on housing benefit.

• Corporation tax cut from 28 to 24 per cent over four years.

• Small companies corporate tax rate cut to 20 per cent.

• Family tax credits reduced for families earning £40,000 or more.

• National Insurance increase for people earning more than £40,000.

• The child element of the Child Tax Credit will rise by £150

• From 2011 an annual levy on banks raising up to £2bn a year.

• No change to petrol, tobacco or alcohol. Planned 10 per cent cider duty increase scrapped.

• Capital Gains Tax remains at 18 per cent for low and middle-income savers but from midnight taxpayers on higher rates will pay 28 per cent. Capital gains tax special rate of 10 per cent extended from £2m to £5m of lifetime earnings.

• Tax relief for video games industry cancelled.

• Tax free limit goes up by around £1,000 to £7,475. Should save average person £200 a year. Higher rate of income tax frozen.

• £30bn of public spending cuts this year. Predictions of 15-30 per cent per government department.

• ‘Broadband tax’ scrapped.

• For the next three years companies outside London and SE exempt up to £5,000 in National Insurance payments for the first ten employees.