George Osborne has defended his economic plans amid claims that he is set to plunge Britain into a period of austerity not seen since the 1930s.
The Chancellor grabbed headlines with the historic stamp duty reforms he announced, but cuts of £60bn to non-protected areas like police, local government and justice will be required in the coming years if he is to meet his targets, the government spending watchdog said.
He told Sky News his plan to clear the deficit by 2020 was "balanced".
Mr Osborne said: "We're taking a number of years because I think that's the right pace. The path we're on has given Britain not just the fastest growing economy in the world, but it means...you've got real world evidence that we've got the right long-term plan."
He justified the "giveaways" in his Autumn Statement, saying the country "can't afford not to" invest in areas like roads and flood defences.
He said: "It's precisely because we didn't invest in those things in the last decade that our country was not equipped for the modern economy.
"We've got to make sure our deficit is coming down but we shouldn't do that at the expense of the big long-term investments that secure jobs for generations to come."
The Chancellor was scathing about his Liberal Democrat coalition partners after Business Secretary Vince Cable said his plan to bring public spending down to 35% of GDP as "wholly unrealistic".
He said: "In private they sign up to these decisions but then in public they slag them off. But that's for them to explain to you."
Shadow Chancellor Ed Balls said Mr Osborne was being forced to accelerate spending cuts because he had failed to balance the budget.
He told Sky News: "He said he'd make people better off and that hasn't worked. People's wages are still falling compared to prices.
"And it's that cost of living crisis which means for the next few years the revenues aren't coming in and he's got a huge problem and he's saying he can somehow solve this with bigger spending cuts than before."
He said the Chancellor's promise of tax cuts worth £7bn in the next parliament were an "unfunded fantasy".
But he said Labour would keep the stamp duty reforms and abolition of air passenger duty for children, while making savings by measures including reversing top rate tax cuts and taking winter fuel allowance away from rich pensioners.
The stamp duty changes that could cut £4,500 off the cost of an average home have come into force - a move welcomed by thousands of buyers.
Detailed verdicts from leading financial experts will be delivered later on all the contents of George Osborne's Autumn Statement.
But the Chancellor's shake-up of stamp duty was the most eye-catching policy.
He has scrapped the "slab rate" of stamp duty - which means huge increases in tax when house values enter a new band.
In future, he said, the tax would apply progressively, like income tax.
The new rates will see house-buyers pay 0% on the first £125,000 then 2% on the portion up to £250,000, 5% up to £925,000, 10% up to £1.5m and 12% on anything above that.
First-time buyer Martin Gaine, from west London, said the change could save him as much as £4,000 on his prospective purchase.
"It's a lovely surprise because it wasn't trailed in any of the newspapers," he told Sky News as he viewed a two-bedroom flat in Chiswick, on the market for £600,000.
"Stamp duty is a big outlay and it's an up-front cost that you don't get back so this is brilliant news. Every little bit helps at the moment, so to save that money will be fantastic for me."
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Gallery: Stamp Duty: How Much Will You Save?
Homes bought for under £125,000, such as these terraced houses, are unchanged by the new rules and buyers still do not have to pay any Stamp Duty
Someone choosing a typical three-bedroom semi-detached costing £185,000 would pay £1,200 instead of £1,850 under the old rules - a £650 saving
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