Chancellor George Osborne has announced a further £30 billion of savings will be required by government over the next three years.
In his budget statement Osborne said by 2017-18 £13 billion of savings would come from government departments, £12 billion from welfare cuts and £5 billion from clamping down on tax evasion and avoidance.
Osborne also announced a freeze on fuel duty, which was due to go up in September, and this has been welcomed by CitySprint chief executive Patrick Gallagher.
“High petrol costs disproportionately hurt SMEs and low-income families and we applaud today’s fuel duty freeze,” said Gallagher. “Recent reductions in oil prices have provided a lifeline for the small businesses across the UK that we work with. It is no coincidence that the five years of frozen duty has coincided with the country’s return to economic growth. Small businesses are a vital part of the recovery.
“It is important that we do not let this commitment slip, and we would urge all parties to commit to maintaining this freeze as a manifesto pledge ahead of May’s election. This commitment would provide an excellent opportunity to support Britain’s start-up businesses."
Osborne also said the North Sea oil industry would get a £1.3 billion boost from tax breaks.
The chancellor said the economy was predicted to grow by 2.5 per cent this year, 2.3 per cent in the following three years and 2.4 per cent in 2019.
He said the improved economic outlook meant the budget deficit would be cleared a year earlier than previously predicted, in 2018-19. In this year a surplus of £5.2 billion would be generated and national debt as a proportion of GDP would be 74.8 per cent, down from 80.2 per cent this year.
Opposition leader Ed Miliband said the government had failed on promises to clear the deficit in five years. “Their failure on the deficit means they are planning massive cuts in the next parliament,” he said.