THERESA May has insisted that Philip Hammond's job as Chancellor is safe after a "very good" Budget.

The Prime Minister praised her colleague during a visit to Leeds following reports in recent weeks that she might try and move him in a “regeneration” Cabinet reshuffle.

Asked if Mr Hammond's job was safe, Mrs May laughed and said: "Yes. The Chancellor did a very good job yesterday."

The PM said the Budget had been about investing in the future, explaining: "What the Chancellor was doing was setting out how we will ensure we have an economy fit for the future.

"Both the Chancellor and I agree that what the Budget was about was about jobs for people up and down the country. It's about ensuring that people are in work.

"This was a Budget that was, yes, about investing for the future, investing in infrastructure, making sure we're building enough homes that the country needs, giving people who are trying to get their foot on the housing ladder that boost by abolishing stamp duty for first time buyers on properties up to £300,000.

"But, also, recognising that, yes, people are feeling pressure today and that's why we continue freeze fuel duty - that's a real help to people - who we're increasing personal allowance - that's a tax cut for people."

Mrs May said she wanted to "reignite the dream of home ownership for people."

And Mr Hammond said the flagship Budget tax cut to assist first-time buyers would help a million people get on the housing ladder.

The move has put pressure on Derek Mackay, the Scottish Government’s Finance Secretary, to repeat the move when he delivers his Budget next month.

It is calculated that the move by the Treasury to scrap stamp duty for first-time buyers on property up to £300,000 could see Scots in a similar position worse off by as much as £4,600 if the Land and Buildings Transaction Tax is not changed.

The Chancellor’s move to raise the higher 40 per cent rate of income tax threshold next year from £45,000 to £46,350 for taxpayers in England, could see those in Scotland £670 worse off if Mr Mackay keeps the Scottish rate at £43,000.

Mr Hammond’s tax breaks illustrates the growing divergence on tax between Scotland and England.

Liz Cameron, Chief Executive of the Scottish Chambers of Commerce, warned: “When the Finance Secretary announces the Scottish Budget next month, the net result should not be to make Scotland the most highly taxed part of the UK.”

But Donald Tosh, a director at wealth manager Brewin Dolphin, noted: “Over the next few years I would expect the spread between being a higher-rate taxpayer in Scotland and in the rest of the UK to widen further.”

The day after his Budget statement, the Chancellor dismissed criticism of the policy from the Office for Budget Responsibility, which predicted the abolition of stamp duty would push up prices by around 0.3 per cent; meaning many first-time buyers would have to pay more than they otherwise would while the main gainers would be people who already owned a property.

It also suggested that only around 3,500 additional homes would be sold as a result of the incentive.

But Mr Hammond told the BBC: "The OBR looked at a particular narrow question - if you reduce stamp duty and don't do anything else, what would happen?

"But we have not done 'nothing else'. We have introduced a very big package, £15 billion of extra money going in on top of the billions we are already spending on housing to increase the number of houses that we build in this country.

"The important thing is that over the next five years, over the life of this parliament, a million first-time buyers will make an average saving of just under £1,700 when they buy their first home."

After the OBR downgraded growth forecasts due to poor productivity performance, the Chancellor said the challenge for the nation was to "prove them wrong".

The Chancellor's home-buying incentive was part of a giveaway package which pumped an additional £25bn into priorities such as housing, infrastructure and the NHS.

However, it emerged that a large part of that figure, £15bn, is due to be raised over the next five years by selling off taxpayer-owned shares in the Royal Bank of Scotland. The SNP’s Ian Blackford condemned the move as a “fire sale” as the shares look set to be sold off at half the price the public paid for them.

Labour’s John McDonnell said the UK's productivity crisis could have been avoided if governments had been prepared to borrow more to invest in boosting the economy.

"I would have stopped the tax cuts to the corporations and the rich. That would have paid for our public services.

"I would have borrowed more to invest in our economy," the Shadow Chancellor told ITV's Good Morning Britain.