The Chancellor delivered his Autumn Statement to a rowdy commons as he downgraded the growth forecast this year to 0.9% from the 1.7% forecast in March, and 0.7% down from 2.5% for 2012.
The statement generated little excitement as Mr Osborne pledged to protect Britain from the debt storm and chronic lack of confidence within Europe. So were there any surprises?
Credit rating up
In an obvious move to encourage confidence, the Chancellor made a point of Britain being the only major western country that has had its credit rating improved in the last 18 months.
He said we were borrowing money more cheaply than Germany and while borrowing is £112 billion higher over the next 4 years than his previous forecasts, debt interest payments are £22 billion less than expected.
Public sector pay cap
The Chancellor announced a cap on public sector pay – a move unlikely to help negotiations ahead of the strikes over pensions due this week. Mr Osborne said public sector pay rises will be capped at 1% for two years, when the current pay freezes end next year.
The news is unlikely to go down well, with the public sector expecting 2% pay rises after the two-year freeze, yet the Chancellor defended the move, saying: "I accept 1% is tough, but it is also fair to those who work to pay the tax to fund it."
To bring home ownership within reach of more families, the Chancellor announced a renewal in the right-to-buy scheme, which he claims was "slowly strangled" by the previous government.
Families in social housing will be able to buy their property at a 50% discount – the receipts of which will be reinvested to build affordable new homes.
Mr Osborne also confirmed the new mortgage indemnity scheme announced last week, to underwrite part of the risk, along with house builders, of lending to first time buyers to help 100,000 more reach the first rung of the property ladder.
State pension and benefits
The Chancellor confirmed that all welfare payments would increase in April in line with September's CPI figure of 5,2% - not less as was previously feared.
Yet tax credits – which are claimed by working families on relatively low wages – will be frozen, with the exception of the "child element" of the working tax credit – which will be uprated in line with the CPI at 5.2%. But Mr Osborne announced that plans to increase the child element over and above inflation would be scrapped.
The Chancellor also announced that the basic state pension to rise by £5.35 to £107.45 a week, and the pension credit for the poorest elderly people will rise by £5.35.
Acknowledging the pressure on working families, the Chancellor announced that the free nursery places, available for three and four-year-olds, will be extended to some two-year-olds. He said there will be 260,000 places for children from the most deprived homes - up from the 140,000 places proposed earlier this month.
In order to make it easier for parents to return to work, three and four-year-olds are currently entitled to 15 hours per week of "early education" for 38 weeks a year. This will now be extended to about 40% of two-year-olds - at a cost of £380m per year by 2014-15. The places can be in nursery schools, children's centres, day care nurseries, playgroups, pre-schools and with accredited child minders.