THE chancellor yesterday claimed that Britain’s economic plan is working but said he had to keep on making tough decisions as he announced yesterday’s mini budget.

In his Autumn Statement George Osborne set out plans to raise the state pension age, for spending on welfare to be capped and for a further freeze on fuel duty.

Mr Osborne told MPs: “The hard work of the British people is paying off and we will not squander their efforts.”

He said growth forecasts were up, airing predictions that there would be 400,000 new jobs in 2013 and that the government would see a surplus rather than a deficit by 2018/19.

The state pension will rise by £2.95 a week, Mr Osborne announced, with pensioners offered the chance to make voluntary contributions.

But the new principle that people should spend one third of their adult life in retirement means the state pension age will increase to 68 in the mid-2030s and 69 in the late 2040s.

Next year’s planned fuel duty rise will be scrapped, while some £100 million of fines on banks will go to military charities.

Welfare spending will be capped, but will not include the state pension or most cyclical job seeker benefits.

Meanwhile job seekers aged 18 to 21 without basic Maths or English will be required to undertake training or lose their benefits.

In response Labour’s shadow chancellor Ed Balls accused Mr Osborne of being in “complete denial”, and said living standards for families were falling “year on year”.

Overall the Wales Office said the Welsh Government would get an extra £100 million over two years.

But Jane Hutt, Welsh Government finance minister, said the Autumn Statement “has done little to change the challenging public finance outlook for Wales.”

Yesterday’s confirmation of free school meals to all school children in reception and years one and two did not apply to Wales.

The Welsh Liberal Democrats called for the Welsh Government to use an extra £54 million to implement a similar scheme here.