George Osborne hailed the success of the coalition’s austerity plan as he delivered his fifth Budget today - insisting the Government will be back in the black by 2018.
The Chancellor said the Office for Budget Responsibility (OBR) was now predicting a 0.2% surplus in 2018/19, meaning that he could deliver boosts to hardworking families and savers.
But he stressed that he would not loosen the purse strings despite economic growth being revised up, and the Government would keep “”putting Britain right”.
“I can report today that the economy is continuing to recover - and recovering faster than forecast,” Mr Osborne told MPs.
“We set out our plan. And together with the British people, we held our nerve. We’re putting Britain right.
“But the job is far from done. Our country still borrows too much. We still don’t invest enough, export enough or save enough.
“So today we do more to put that right. This is a Budget for building a resilient economy.
“If you’re a maker, a doer or a saver, this Budget is for you.”
Mr Osborne added: “It is all part of a long-term economic plan - a plan that is delivering security for the people of this country.
“In 2018/19 we won’t be borrowing at all. We will have a small surplus of almost £5 billion.
“Taken together, these new figures mean Britain will be borrowing £24 billion less than was forecast. That’s more than we spend in an entire year on the police and criminal justice system.”
Mr Osborne warned that cuts would continue, with a cap on welfare bills including housing benefit and tax credits.
Only the State Pension and the cyclical unemployment benefits will be excluded.
The move lays down the gauntlet to Labour to match the figure.
Mr Osbotrne said the cap would be set it at £119 billion in 2015-16. It will rise, but only in line with forecast inflation, to £127 billion in 2018-19.
The Chancellor told MPs: “None of these decisions are easy, but they are the right thing to ensure Britain lives within her means.”
And he added: “Britain should always be proud of having a welfare system that helps those most in need.
But never again should we allow its costs to spiral out of control and its incentives to become so distorted that it pays not to work.”