Cuts in public spending of £3.5bn per year up to 2020 were announced in the budget.
Chancellor George Osborne said under his plans the government’s finances would be in surplus to the tune of £10.9bn in 2019-20.
Osborne said the UK economy was predicted to grow by 2% this year and 2.2% in 2017 but growth in the global economy had been revised downwards. UK inflation is expected to be 0.7% this year and 1.6% next year.
The chancellor said these predictions were based on the UK staying in the European Union, a position he supported, and “we should not put at risk all the hard work people have done to make our economy strong”.
Osborne announced taxes on the oil and gas industry would be halved, to support businesses suffering because of low oil prices, and fuel duty would be frozen for the sixth year running. He also said the corporate tax rate would be cut to 17% by 2020.
The go-ahead was also given for Crossrail 2 in London and HS3, linking key cities in the north of England by rail, along with a “tunnel road” between Manchester and Sheffield.
Opposition leader Jeremy Corbyn attacked the chancellor for failing to balance the budget and said spending cuts were hitting those on lower incomes disproportionately. “This budget has unfairness at its core, paid for by those who can least afford it,” he said.
The fuel duty freeze was welcomed by industry bodies but the British International Freight Association (BIFA) but was concerned about lack of investment in roads.
Robert Keen, BIFA director general, said: “Back in November 2015 BIFA welcomed the news that funding would be provided for the largest road investment programme since the 1970s.
“But it would have been good to hear more good news on this front given that a lack of spending has caused the country’s network of A roads and motorways to become congested, undermining the UK’s competitiveness in comparison to its international peers.
“The earmarking of £230m for road improvements in the north of England, including upgrades to the M62, feels like a drop in the ocean compared to last year.”
Peter Ward, CEO of the United Kingdom Warehousing Association, said: “The chancellor’s comments regarding the global economic outlook reinforce the fact, if indeed it needed reinforcing, that high professional standards, lean operations, innovation and a lot of hard work will remain fundamental requirements for companies operating in the 3PL sector.”
He added: “Societal shifts will lead to inevitable growth in logistics activity and substantial investment on roads and other key infrastructure projects must be given priority.”