Minister for Pensions, Torsten Bell, said the Government was providing breathing space for firms and families in a Budget delivered during a time of significant global economic pressures.

In a briefing with journalists, Mr Bell highlighted measures outlined by the Chancellor John Healey to support consumers and boost devolution and defence.

He said: “What is the big picture? You've got a Budget happening at a time of significant global economic pressures and those are obviously pushing up costs, and in the face of that, the Chancellor is steering through it by providing breathing space for firms and families today but also addressing some of the big challenges the country faces for its future and those are particularly on energy, on devolution and on defence.

"The starting point is obviously, in the face of those pressures, that British firms and British workers have been much more resilient than people expected going back nine months.

"Remember the last OBR forecast..did not take into account any effects of the Iran war which happened just after they closed their forecast period. But, if you look at what's happened, we have seen faster growth in the UK than any other G7 country over the first part of this year. Even after the OBR's forecast closed, we saw 0.7 per cent growth over the three months to August.

"If you look at the OBR and you look at what's happening in terms of GDP per capita, which is what matters to living standards, over the forecast period you are seeing growth being upgraded from 1.1 per cent a year to 1.3 per cent a year, and that is because migration is down and business investment is up.

"Business investment in Britain today is at the highest level in a decade."

He said the credit for the resilience belongs to British firms and British workers.

"What we're doing in the face of that is saying, 'we're going to provide you with breathing space today' building on the announcements made by the Prime Minister and the Chancellor over the course of the last few months.”

Millions of households will receive £100 to help with soaring energy bills and high street firms will get a tax break as John Healey sought to protect British workers and businesses from the economic impact of the Iran war.

Around 20 million households in council tax bands A to D will receive £100 from the Government this winter to help with the bills.

The Chancellor said he would increase the threshold for 100% small business rates relief for hard-hit retail and hospitality firms from £12,000 to £18,000, with tapered relief from £21,000, up from £15,000.

This will mean an extra 70,000 firms taken out of paying business rates altogether, he added.

Mr Healy also turned to online marketplaces to help pay for the high street support, with plans to make them responsible for collecting VAT owed by all retailers selling on their platforms.

Mr Bell added: “On the high street package; the simplest way of explaining the lots of different bits we have announced today, which is a really significant package, is that all retail, hospitality and leisure firms will see their business rates frozen, cut or removed entirely over the course of the next few years.

"We're paying that by requiring online businesses to pay VAT properly.”