East Lancashire Chamber of Commerce boss Mike Damms said yesterday's Budget seemed ‘well-balanced’ with pain shared across many areas.

He said: “There are no great sur-prises here – it seems to be what people were expecting.

"I think it is not yet clear what impact the VAT rise will have, but the evidence from the VAT reduction in 2008 is that consumers don’t necessarily think about it.”

He said measures to cut corporation tax and taxes paid by small businesses, and the rise in the National Insurance threshold, would help make Britain more ‘business friendly’.

Blackburn MP Jack Straw said: “This is a high-risk budget and it will lead to higher unemployment in less well-off areas like East Lancashire.

“We have already seen with initial Government cuts that the poorer areas suffer the most.

"On top of that, a regressive tax like VAT will hit poorer families hardest because they pay out a larger proportion of their earnings on consumer goods.”

Mr Osborne also increased the Child Tax Credit by £150 and capped Housing Benefit at £400 a week.

Hyndburn MP Graham Jones criticised plans to impose 25 per cent cuts to every government department bar the NHS and International Development.

Writing on his blog, he added: “Unemployment will rise if people are made redundant, an argument offset by the equally simplistic idea that the private sector will flick on the light switch of jobs, encouraged we are told by small tax cuts.”

And Mr Jones, who won the Hyndburn seat for Labour last month, claimed that the cuts in corporation tax would not influence businesses to create more jobs,

Burnley MP Gordon Birtwistle, Ribble Valley MP Nigel Evans, Rossendale and Darwen MP Jake Berry and Pendle MP Andrew Stephenson were unavailable for comment yesterday.