Alistair Darling told MPs that he was presenting a responsible Budget that sought to maintain stability for Britain’s economy in the face of global insecurity.

The Chancellor said that the Government’s record meant that the economy was better prepared to withstand a downturn while preparing for future challenges, confronting climate change and ending child poverty in this generation.

“With low inflation, record levels of employment and unemployment at its lowest level for a generation, and with the action taken last year to curb inflation, Britain is better placed than other economies to withstand the slow-down in the global economy,” he said.

His aim, he told the Commons, was to make sure that everyone, regardless of their circumstances, could exploit their potential. He said that this would help to build a fairer society with more opportunities.

Rose-tinted specs fail to offer hope

The obvious justification for Mr Darling’s relatively upbeat scenario is that the outlook is fraught with uncertainty

Background

• Darling's first Budget: the main points

• The Chancellor's speech in full

• Darlings first Budget: the reaction

• Chancellor hits the home budget as his debts soar

• Need to know: Budget 2008

The Chancellor delivers a modest Budget

As so often is the case, virtue, in terms of improving public finances, is not now, but at least a year away

Multimedia

• Video sketch: Matthew Parris and Ann Treneman

• Eco-worrier: should we be pleased?

• Green Central: round-up of the green Budget measures

Multimedia

• Red Box: a list of Darling's new enemies

• The winners and losers

• Video: the 'fingers crossed' budget

“Between the early 1970s and the mid1990s the UK was one of the least stable economies in the G7 [group of leading industrialised nations]. Today we are the most stable,” he said. “The reforms we have made since 1997 – independence for the Bank of England and tough fiscal rules – mean that Britain is now more resilient and better prepared to deal with future shocks. And it is better equipped to meet the challenges of rapid global change.”

He defended previous increases in public spending, saying that they met the rule set by his predecessor that the Government should borrow only to invest. “As a result waiting lists are down; school standards are up. More people are using public transport than ever before. Aid for the world’s poorest countries has doubled in real terms. The defence budget has seen the longest period of increased spending in a generation.”

Mr Darling added: “This has been an exceptional commitment to improving public services. By 2010-11 we will have seen the longest sustained expansion of investment in public services in recent history.”

Spending would continue to be matched by reforms to enhance value for money and improve the delivery of public services, the Chancellor said.

David Cameron accused Mr Darling of living in a different world from other Britons. He said that the Budget ignored the impact of the rising cost of living on families.

“For people, every time they refinance their mortgage it’s costing them more,” the Conservative leader told the Commons. “Every time they fill their car up they’re paying more. Every time they shop, food bills are higher. And yet every time they get a tax bill they’re paying more. There was no recognition of that in this Budget. The cost of living is going up, and Labour are making it worse.”

He accused the Chancellor and Gordon Brown of taking the credit when the global economy was growing but refusing to take the blame when the economy ran into difficulties.

Mr Cameron asked why the Budget speech failed to mention that Britain’s current account deficit was set to rise to a record £72 billion, that the rate of business investment would drop by two thirds and - once the liabilities of Northern Rock were included – debt as a share of gross domestic product was 43.8 per cent. This broke the fiscal rule introduced by Mr Brown that public sector debt should not exceed 40 per cent of GDP.

Abolishing the 10p starter rate of income tax meant that 5.3 million low-paid workers would be worse off, he said, among them many NHS staff, teaching assistants and soldiers fighting in Afghanistan.

Nick Clegg, the Liberal Democrat leader, described the Chancellor as a ventriloquist’s dummy speaking the words of Mr Brown. “This is a Budget which gives only limited help to the poor, but maintains special help to the rich,” he said. Making his first Commons response to a Budget statement, he suggested that the changes announced to tax credits for low-paid parents would not leave the Government “anywhere near” meeting its target to halve child poverty by 2010.

He criticised the postponement until October of the scheduled rise of 2p a litre in fuel duty, saying that “at the first sign of political difficulty the Government ran away”.

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