UPDATE: BUDGET 2017: Chancellor accused of breaking tax rise promise

Labour vowed to oppose what it termed an "unfair £2 billion sole-traders' tax on the self-employed low and middle income earners", while Liberal Democrats branded the move a "jobs tax".

And the Chancellor also hit savers by cutting tax-free dividend allowances from £5,000 to £2,000, in a move designed to reduce tax incentives for workers to register themselves as companies.

The measures helped raise cash for a bid to resolve two of Theresa May's worst political headaches, as Mr Hammond announced £2 billion for social care in England and a £345 million package to ease the impact of the business rate revaluation.

But the Chancellor said that the Budget package was neutral overall, as he stored up a war-chest for expected choppy waters ahead as the UK goes through the process of Brexit.

He was buoyed by a short-term boost to official growth forecasts, upgraded from 1.4% to 2% for this year. But the Office for Budget Responsibility (OBR) took a gloomier outlook for the following period, slashing predicted growth from 1.7% to 1.6% in 2018 and from 2.1% to 1.7% as Brexit takes place in 2019.

Borrowing was revised downwards by £16.16 billion for 2016/17 to £51.7 billion. And the OBR tweaked deficit forecasts down in each of the next five years, reaching £16.8 billion in 2021/22.

Mr Hammond said the Budget sets out a plan for a "brighter future" as the UK leaves the European Union.

With the Prime Minister expected to start the formal Brexit process within days, the Chancellor told the Commons: "As we start our negotiations to exit the European Union, this Budget takes forward our plan to prepare Britain for a brighter future; it provides a strong and stable platform for those negotiations."

But shadow chancellor John McDonnell said he was "building our economy on sand", leaving the UK "less prepared for the challenges we face outside of the EU".

Despite measures for women, including £20 million to tackle domestic violence, £5 million to help mothers return to work and £5 million for celebrations of the centenary of votes for women, Mr McDonnell said the Budget - which fell on International Women's Day - had "failed the fairness test for women" who are hardest hit by public service cuts.

Mr Hammond's decision to increase the Class 4 National Insurance contributions (NICs) paid by the self-employed from 9% to 11% over two years from April 2018 will raise just over £2 billion in four years from 2.485 million workers.

The Treasury stressed that, taken together with a previously-announced decision to abolish Class 2 NICs, the overall additional revenue totals just £145 million a year - the equivalent of 60p a week for 1.6 million self-employed people.

The abolition of Class 2 NICs by Mr Hammond's predecessor George Osborne in the 2016 Budget had been due to save 3.4 million people an average £134. Mr Osborne said at the time that it would "allow millions of self-employed individuals to keep more of their money and invest it back into growing their business".

But Mr Hammond told MPs the "dramatically different" treatment of employees and self-employed people under NICs was costing the Treasury £5 billion a year and was "no longer justified by the difference in benefits entitlement".

"That is not fair to the 85% of workers who are employees," he said. "To be able to support our public services in this Budget and to improve the fairness of the tax system, I will act to reduce the gap to better reflect the current differences in state benefits."

Labour's deputy leader Tom Watson said the move was a clear breach of a promise to voters in the 2015 general election, saying: "The Tories put a promise not to raise National Insurance in their manifesto four times. Today they're breaking that promise."

And Tory former minister Andrew Murrison told the Commons it was "vitally important" to ensure the change did not disadvantage "White Van Man".

Liberal Democrat Treasury spokeswoman Baroness Kramer said: "This is a tax on builders, taxi drivers and window cleaners, some of Britain's hardest working people. This hits the gig economy where people are already insecure and facing rising prices and job uncertainty. And on International Women's Day, it will hit over one-and-a-half million women.

A Treasury source insisted that the Government had "kept its manifesto commitments", as legislation published after the election made clear that the pledge applied only to the Class 1 NICs paid by employees.

But the manifesto itself makes no distinction between different classes of contribution, stating simply: "A Conservative Government will not increase the rates of VAT, Income Tax or National Insurance in the next Parliament."

Some 2.2 million people - including 7% of all the country's pensioners - are expected to lose an average £320 a year due to Mr Hammond's changes to dividend allowances.

Half are director-shareholders who have incorporated themselves as companies, but the others include savers with holdings of more than £50,000 in stocks and shares outside ISA schemes

The crisis in social care in England forced Mr Hammond to pledge an extra £2 billion over three years to help ease the pressure.

The money, with £1 billion promised in 2017/18, follows intense pressure from MPs and councils, but falls short of the levels of funding demanded by some campaigners.

Mr Hammond acknowledged the system was "clearly under pressure", with the NHS suffering as a consequence.

The Chancellor also announced a £100 million plan to ease the pressure in A&E units.

Referring to the Tory victory in the Copeland by-election, he said: "We are the Government of the NHS."

Mr Hammond had come under pressure before his Budget to provide extra money for social care and measures to ease the pressure on businesses facing rate rises.

He provided extra money for both - but hit higher-earning self-employed workers with a tax rise as he tried to ensure that he kept the public finances under control.

Labour leader Jeremy Corbyn accused him of "utter complacency" about the state of the economy, public services and the lives of millions of Britons.

In response to the campaign for measures to ease the impact of the business rates revaluation, Mr Hammond set out a £435 million package - including a £1,000 cut for most pubs.

Committing to longer term changes to the system, including better ways to tax online firms, the Chancellor acknowledged that the business rates revaluation had created some "hard cases".

Under his package of reforms, he said firms set to lose small business relief would benefit from an additional cap on bill rises, limiting hikes in monthly bills to £50 for a year.

Pubs with a rateable value of less than £100,000 - some 90% - will be given a £1,000 discount on their rates in 2017.

Councils will also be given a £300 million fund to deliver "discretionary relief" to hard-pressed firms in their areas.

Under his reforms to National Insurance contributions, Mr Hammond said higher-paid self-employed workers will face rises of around 60p a week, raising an extra £145 million a year for the Exchequer by 2021-22.

Mr Hammond said the Budget sets out a plan for a "brighter future" as the UK leaves the European Union.

With Prime Minister Theresa May expected to start the formal Brexit process within days, the Chancellor told the Commons: "As we start our negotiations to exit the European Union, this Budget takes forward our plan to prepare Britain for a brighter future; it provides a strong and stable platform for those negotiations."

He added: "We are building the foundations of a stronger, fairer, more global Britain."

In a speech littered with jokes - despite being nicknamed "Spreadsheet Phil" because of his usual dry style - Mr Hammond announced: :: Transport spending of £90 million for the north and £23 million for the Midlands to address pinch points on roads, and a new £690 million competition for English councils to tackle urban congestion.

:: The NHS will get £325 million to implement controversial sustainability and transformation plans and another £100 million will be put into triage projects to ease the burden on A&E departments.

:: There was no change to previously planned upratings of duties on alcohol and tobacco, but a new minimum excise duty is introduced on cigarettes based on a packet price of £7.35.

The Budget will also mean £350 million for the Scottish Government, £200 million for the Welsh Government and almost £120 million for an incoming Northern Ireland Executive.

With Mrs May attempting to see off the potential for a second Scottish independence referendum, Mr Hammond said his package was "demonstrating once again that we are stronger together in this great United Kingdom".