The size of the deficit is down to 5% of GDP according to the Chancellor, George Osborne, who highlighted the growth of the economy over the last four years, up 8% in this parliament, in his Autumn Statement.

‘The economy has grown faster than previously reported, up 8% in this parliament. Business has investment has grown by 27%,’ said Osborne. But he stressed that ‘warning lights are flashing over the global economy, Japan is in recession and Eurozone is contracting’.

‘Britain’s long-term economic plan is working,’ he said.

‘Growth we are now seeing is more balanced. Manufacturing is growing faster than any other sector, up 11%. This balanced growth is creating jobs too with a record number in work. Over last year half a million new jobs have been created and unemployment will fall to 5.8% next year, predicted to settle at 5.3%.’

‘Tax receipts have not been rising as quickly as OBR predicted and will be £23bn lower by 2018.’

The austerity programme will continue for the next three years, including freezing of welfare benefits for the next two years.

‘We need to have very substantial savings in public spending – we will publish a charter on how we intend to cut public spending, which will be put to parliament.

Osborne confirmed that £13.6bn cost cuts are planned for 2015, and confirmed that this will continue until 2017.

‘There will be two further years when this level of cuts is planned. We have got the pace right - we have come in under budget every year of this parliament.

With the slowdown in the eurozone, Osborne announced a ‘£45m package to provide new support for first-time exporters’.

There will also be more support for crowdfunding, extension for social entrepreneurs relief and tax breaks for creative industries with theatre tax extended to orchestras and new children's television tax credit.

'Today we are ranked second in the global innovation index, today I am going to revolutionise the support for our post graduates, with loans up to £10,000 for post graduate students.'