George Osborne admitted the UK’s age of austerity will extend a year longer than planned.
In his Autumn Statement at Westminster on Wednesday, the Chancellor admitted he would miss his target to cut debt by 2015/16 and said the economy was still facing major problems.
However, he refused to alter the Government’s economic plans, claiming the country was “on the right track and turning back now would be a disaster”.
There was good news for drivers, with a planned 3p rise in fuel duty scrapped.
Plans to set up superfast broadband and increased wifi access in Perth were unveiled.
It was also announced that the overall spending power of the Scottish Government will increase by £331 million compared to last year.
Although the Scottish budget will be cut by 0.2% next year and 0.4% for 2014/15, an extra £394m of capital funding over the period provides the extra cash.
Quoting the latest Office for Budget Responsibility growth forecast, Mr Osborne said the UK economy was now expected to shrink by 0.1% this year compared with a previous prediction of 0.8% growth.
The Chancellor’s plans include a 1% cut in corporation tax, an increase in income tax personal allowance with no tax being paid on earnings under £9,440 and a rise of 1% to the threshold for the top rate of income tax.
Most benefits will be set at a 1% increase for the next three years and child benefit will rise by 1%.
The basic state pension will increase next year to £110.15 a week but the annual allowance for tax-free contributions will be cut from £50,000 to £40,000.