Shoppers struggling during the credit crunch have demanded stores lower the prices of all their VAT-rated products following the reduction in the tax.

The move – which was announced in the middle of the busiest time of the year for shopkeepers – saw the level of VAT fall from 17.5% to 15%.

However, according to some bargain hunters, leading stores, who were not consulted by the Government before announcing the cut, are not passing on the price change.

Grandfather Charlie Wood said he was told “it was at the shop’s discretion”

whether prices were reduced after purchasing a £4.99 Everyday Words Flashcard in Borders in Churchill Square, Brighton.

Mr Wood said: “It’s the principle. Shops should be duty bound to pass on the reduction on all their products.

“It seems like a nasty way of making money from people who are already struggling to pay for Christmas during the recession.”

Brighton and Hove city centre manager Soozie Campbell said the cut in VAT was designed to boost an ailing economy but risked being an empty gesture She said: “It’s good to be seen to reduce prices because that is what it was introduced for – to stimulate the economy.

“But it is such an empty gesture that is probably not going to do that anyway. Big shops should be easily able to recalculate prices of their stock and could pass the reduction on.

“The problem is for smaller shops which don’t have electronic systems and have to recalculate every item.”

Jason Gordon at Ernst & Young, an accountancy firm which advises retailers, said: “It’s not just the cost of printing the tickets, it’s the time and cost of employing a member of staff to change all the prices, when they could be putting stock on shelves.

This is right in the middle of peak trading and most retailers have more important things to juggle.

“I think a significant minority of smaller retailers will not pass it on.”

A Borders spokesman said: “Following the Government’s recent announcement to reduce VAT from 17.5% to 15%, Borders has reviewed its pricing both in its superstores and online.

“VAT is not applied to books, magazines or newspapers, which represent the majority of Borders product offer, and so these categories are unaffected.

In categories such as CD, DVD and the recently launched Home Office range, however, Borders has reviewed its prices.

“Rather than reduce the price of every item by a small percentage, Borders is making permanent price changes across best-selling items to offer customers more meaningful savings.”