Chancellor Philip Hammond has given a sobering assessment of the economy, saying it is expected to grow more slowly than previously thought.
But he sought to rally Conservative MPs in his Budget by scrapping stamp duty for the first £300,000 spent by first-time buyers, a saving of up to £5,000.
The cut will apply to buyers in England, Wales and Northern Ireland.
Mr Hammond also promised £1.5bn to “address concerns” about the flagship universal credit scheme.
Labour leader Jeremy Corbyn said the government had a “record of failure”.
At the start of his speech, Mr Hammond struck a positive note, saying the economy continued to “confound those who seek to talk it down” by creating jobs and continuing to grow.
But he then said productivity levels remained “stubbornly flat” with growth until 2021 expected to be lower than predicted in March.
It is the first time in a generation that growth is forecast to grow below 2% every year.
Mr Hammond’s statement came with him under pressure from Eurosceptic Tory MPs and others calling for more spending to ease austerity.
The chancellor – who has been accused of being too pessimistic about life outside the EU – said £3bn would be spent on Brexit planning, and that the government would prepare for “every possible outcome”
What were the other key announcements?
- Freezing alcohol duty apart from an increase in duty on high-strength white ciders
- The price of 20 cigarettes goes up by 28p and by 41p for 30g of rolling tobacco
- A promise to fund a pay rise for nurses if one is recommended by an independent panel
- Refunds on VAT for Scottish emergency services
- A one-off tax on new diesel cars that do not meet latest emissions standards
- £28m for Kensington and Chelsea council for counselling and regeneration in the aftermath of the Grenfell Tower fire
- Bringing forward a planned cut in business rate rises by two years to 2018
- An extra £2.8bn for the NHS in England up to 2022
- Support for electric cars including a £400m charging infrastructure fund
- A new railcard offering discounts to those aged between 26 and 30