Chancellor of the Exchequer George Osborne on Wednesday said his government plans to cut public spending further as global economic uncertainty carries "a dangerous cocktail of risks" to Britain's growth.
"Five years ago we set out on a long-term plan, because we wanted to make sure that Britain never again was powerless in the face of global storms," Osborne said in his budget speech to parliament.
"Five years later our economy is strong, but the storm clouds are gathering again," he said. "Our response to this new challenge is clear: We act now so we don’t pay later."
The plan aims to save a further 3.5 billion pounds (4.9 billion dollars) in the financial year 2019-20.
Osborne has overseen a series of public spending cuts since he became chancellor in 2010, announcing cuts in the government's last budget in July.
Among other measures announced on Wednesday were tax support worth 1 billion pounds for the oil and gas industry, a reduction in basic capital gains tax from 18 per cent to 10 per cent, a sugar tax on soft drinks, and a programme to convert state schools into semi-independent academies by 2022.
Responding in parliament, the opposition Labour party leader Jeremy Corbyn accused Osborne of fuelling "more poverty and inequality" through long-term cuts to welfare payments.
He called Osborne "a chancellor for tax dodgers not tax payers; a chancellor for hedge fund managers, not small businesses."
"This budget has unfairness at its very core, paid for by those who can least afford it," Corbyn said.
"Financial markets are turbulent ... and the outlook for the global economy is weak," Osborne said, urging tough financial management to avoid a "dangerous cocktail of risks" globally.
Despite the risks, he said Britain was enjoying "solid, steady growth" when compared to other developed economies.
Osborne quoted government data saying Britain's annual economic growth was 2.6 per cent in 2014 but fell to 2.2 per cent last year and is expected to slow further to 2 per cent this year before rebounding to 2.2 per cent in 2017.
The forecasts are based on Britain remaining in the European Union, he said, quoting a report by the government-run Office for Budget Responsibility as saying "there appears to be a greater consensus that a vote to leave would result in a period of potentially disruptive uncertainty."
"Britain will be stronger, safer and better off inside a reformed European Union," Osborne said, echoing Prime Minister David Cameron's plea for the public to vote to remain in the EU in a referendum on June 23.