George Osborne is delivering his first Budget statement to the House of Commons.
The Chancellor said his emergency Budget "deals decisively" with the country's record debts, paying for the past and planning for the future.
Mr Osborne described his Budget as tough, but also fair, saying the coalition Government had inherited the largest budget deficit of any European economy except Ireland.
The Chancellor said: "Unless the Government delivers concrete measures to tackle debt, the consequences would be "higher interest rates, more business failures, sharper rises in unemployment and potentially a catastrophic loss of confidence and the end of the recovery".
The Chancellor promised not to hide hard choices from the British people or "bury them in the small print".
He also said that Britain was set to miss the Labour government's "golden rule" target by £485 billion.
The Government's "formal mandate" is that the structural current deficit should be in balance in the final year of the five-year forecast period, which is 2015/16.
A fixed target for debt will also be created, which in this Parliament is to ensure debt falls as a share of GDP by 2015/16.
The Office for Budget Responsibility's judgment is that the Government is on track to meet these goals and Mr Osborne said: "We are set to meet them one year early in 2014/15".
