Bradford Chamber of Commerce president Harold Robinson said the Chancellor should have been bolder and cut corporation tax to 20 per cent rather than the planned 24 per cent.

He said: “We welcome the decision to cut corporation tax for the next four years, although we do feel that it could have been allowed to go lower than 24 per cent, perhaps down to 20 per cent. We knew that the spending cuts and tax rises were coming and agree with the Chancellor that some of these measures were unavoidable.

“The mounting deficit had to be addressed while at the same time ensuring that businesses can help the economy grow and get more people into work again.”

Alison Rodwell, of Headway Recruitment, said: “It’s pleasing that the threshold at which employers start paying National Insurance contributions is to be increased. We had appealed for VAT to be considered as an alternative to the previous Government’s plan for a one per cent National Insurance hike, so although we appreciate that it’s a big hike, it’s preferable to a tax on jobs.”

The Budget marked the first step on the long road to restoring the UK’s economic health, said Andrew Palmer, regional director of the employers’ organisation the CBI.

He said: “The Chancellor has achieved his twin objectives of setting out a credible plan for the public finances and producing a convincing growth strategy for the longer-term.

“He has struck a sensible balance on Capital Gains Tax, limiting the impact of the increase on entrepreneurial activity and long-term savers. The five-year route map for Corporation Tax provides much-needed consistency and certainty.”

Retailers were resigned to the rise in VAT from 17.5 per cent to 20 per cent according to Bradford Chamber of Trade.

Secretary Val Summerscales welcomed the fact that the rise had been deferred until next January.

She said: “I’m glad that the Chancellor kept the exemption from VAT on things like food and children’s clothing. In the longer term, however, higher VAT could put some people off making purchases or at least delay buying.”

But the Federation of Master Builders has warned that higher VAT will force more people to turn to cash-in-hand ‘cowboy’ tradesmen to avoid paying the tax. Higher VAT would hit the building trade particularly hard.

The manufacturing body, EEF, said while firms would welcome long-term reform and predictability of Corporation Tax and had been spared the worst impact of changes to Capital Gains Tax, the measures could hit competitiveness.

Alan Hall, EEF regional director, said: “In recent weeks, manufacturers had been encouraged by strong commitments from the Prime Minister and the Chancellor on the role of manufacturing in a better balanced economy. They will now be left wondering where the necessary growth and investment will come from, given the cuts to investment allowances and capital budgets.”