Reaction to today's VAT rise

Labour leader Ed Miliband

"George Osborne should stop treating the British people like fools.

"He claimed that this VAT rise was fair - but David Cameron admitted before the election that VAT rises were unfair.

"Everybody knows it's poor and middle-income families that will be hit hardest."

Chancellor George Osborne

"I think it is a reasonable rate to set, given the very difficult situation we find ourselves in. The VAT rise is a tough but necessary step towards Britain's economic recovery.

"If you don't want to raise VAT, you have got to do something else."

Federation of Small Businesses chairman John Walker

"A recent FSB survey shows that 70% of businesses are worried about the VAT increase, with almost half of respondents going to have to increase prices as a result and 45% believing it will decrease their turnover - neither of which will help small firms take on more staff.

"If the Government truly believes that the private sector is going to strengthen the recovery, we need to see action.

"Increasing the threshold at which companies have to register for VAT will put almost 900 million back in the pockets of small businesses. Without this, small firms will struggle to bounce back as the spending cuts start to bite."

Phil Flanders, Road Haulage Association director for Scotland and Northern Ireland

"The main effect of the VAT rise is people have less money to spend. A lot of people are also worried about their jobs so they are spending less. That means less things to be transported.

"It looks like the big boom in the sales has gone.

"January is usually quieter but there is a lot of uncertainty. Hauliers need certainty. They need to know what they will be paying for fuel this time next month.

"It's a matter of wait and see."

TUC general secretary Brendan Barber

"Raising VAT, while failing to tackle the tax loopholes exploited by big businesses, means that ordinary people will soon pay a higher rate of tax on purchases and earnings than the banks pay on their profits.

"VAT bears down on those who did least to cause the crash, while the Chancellor is asking for little more than a token contribution from the banks."