George Osborne's second Budget was delivered against a gloomy backdrop of deteriorating growth and borrowing figures.
As the independent Office for Budget Responsibility (OBR) predicted the recovery would be weaker than those of the 1980s and 1990s, the Chancellor was claiming to have “put fuel into the tank of the British economy”.
Funded by a £2bn tax on oil companies, he announced a 1p cut in pump prices, which came into effect last night, and postponed the planned 4p-per-litre rise that was set to come in next month.
A fair fuel stabiliser will be introduced to help prevent huge spikes in costs, as it emerged the average price of a litre of unleaded petrol in Northern Ireland hit 133.8p this month, up by more than 11% on December last year.
Labour accused the Chancellor of performing a “classic Tory con” by making cuts in the wake of the higher 20% VAT rate, while the DUP said the measures had not gone far enough.
But Mr Osborne insisted: “It's about doing what we can to help with the high cost of living and the high cost of oil”.
It was a “Budget for growth” MPs were told, targeted at encouraging business growth by stripping back red tape and encouraging entrepreneurs and investors.
Nevertheless, Mr Osborne revealed more downbeat economic forecasts than had previously been predicted. Based on independent analysis, GDP growth estimates for 2011 were downgraded from 2.1 to 1.7%.
Around 25m adults will benefit from a heavily-trailed boost of £630 in the personal tax allowance to £8,105 — worth £126 a year in cash terms.
Together with this year's rise, the change will mean an extra £326 a year for basic-rate taxpayers and will take 1.1m of the low-paid out of tax altogether, said the Chancellor.
Proposals for a cut in corporation tax for Northern Ireland, possibly bringing the rate into line with the Republic's 12.5% levy, will be unveiled today, he said.
Exchequer Secretary David Gauke will head to Belfast to meet the First and Deputy First Ministers for the launch of a consultation on the reforms, which would mean devolving power over the taxation mechanism to Stormont.
Options will range from making the cut in one go or phasing it in over a number of years, as the Assembly block grant will have to be cut, under European law, as a result of any change.
It forms part of the plans to turn Northern Ireland into an enterprise zone to attract inward investment.
Whichever corporation tax option, if any, is decided upon, the UK rate will be reduced by 2% from April and then a further 1% in each of the three following years. That will take it to 23%, the lowest rate among G7 countries.
A freeze in air passenger duty, £60 on an average flight compared to the €3 rate being brought in for the Republic, was also announced in an attempt to encourage foreign investment.
Northern Ireland Secretary Owen Paterson said: “This is the start of a process which could lead to increased investment and make Northern Ireland one of the best places in Europe to do business.”
Alcohol duty rates will go up with the already announced 2% above-inflation rise in excise duties for wine and beer, while cigarettes will go up by up to 50p a packet.
A new carbon levy on fuel could add £30 per year to utilities bills but more money has been set aside to fund new energy sector jobs.
Charitable donations will be simplified, while inheritance tax will be discounted by 10% in return for donating the same proportion of the estate to charity.
Finance Minister Sammy Wilson has said Mr Osborne’s Budget contained “no surprises” for Northern Ireland.
Mr Wilson will now be meeting Treasury ministers to ask them to make allowances for “the uniqueness of our economy”.
The DUP man cited the example of a 15% increase in UK Bank credit, a measure designed to promote growth. But he added that “the local banking sector is dominated by banks headquartered in the Republic, so a more tailored solution is needed”.
Mr Wilson concluded: “Today’s Budget announcement has been about offering support to UK businesses in general, which I welcome. I remain anxious, however, to ensure that the unique characteristics of our regional economy are recognised and addressed.”
East Belfast Alliance MP Naomi Long said: “I welcome the idea behind a fair fuel stabiliser. However, the detail around this proposal has to be subject to further analysis to see if it will genuinely deliver lower and more stable fuel prices for Northern Ireland in the medium to long-term.”