Chancellor Alistair Darling said today Britain was better placed than other economies around the world to withstand the slowdown in the global economy.

Launching his first Budget, Mr Darling said his core purpose was "stability now and in the future."  He told the Commons: "This year’s Budget is a responsible Budget that will secure stability at these times of global uncertainty."

Mr Darling said: "We will do everything in our power to maintain stability - keeping inflation and interest rates low and maintaining our record of growth.

"While other countries have suffered recessions, the British economy has now been growing continuously for over a decade - the longest period of sustained growth in our history."

Mr Darling said that the British economy would "continue to grow through this year and beyond".

He added: "Even in today’s difficult and uncertain times, we are determined that we will not be diverted from our long-term aim - to equip our country for the challenges of the future, confront climate change and to end child poverty in this generation."

His Budget was about equipping Britain for the times ahead and ensuring everyone - regardless of circumstances - could "exploit their potential".

The Chancellor told MPs that the Government’s action to support Northern Rock and protect depositors and savers meant that confidence and stability in the banking system had been maintained despite the "worst period of financial disruption for a generation".

Britain was now "more resilient and better prepared to deal with future shocks," he said, and better equipped to meet rapid global change.

"Ours is the only major industrial economy to see an increasing share of trade in global services - from seven per cent a decade ago to 8-1/4 per cent today," he added.

Mr Darling said: "Despite the slowdown in the world economy, in 2007 the British economy grew by three per cent - the fastest growth of any major economy."

However, he said: "This year my forecast is that - as growth in the world economy slows further - growth in the British economy will be between 1.75 and 2.25 per cent in 2008 - but faster than Japan, the US and the Euro area."

Mr Darling said he was "confident" about the inflation outlook. "There will be no return to the inflation rates of the early 1990s."

Mr Darling announced: "For environmental reasons we will increase fuel duty by 0.5 pence per litre in real terms from 2010."

But he said he would postpone the 2p fuel duty rise, scheduled for April until October "to support the economy now and help business and families".

He said: "Our Budget projection for the current budget balance in 2007/08 will come in at £8 billion as forecast.

"And our projection for net borrowing at £36 billion is £1.4 billion lower than forecast at the time of the Pre-Budget Report.

"Debt too this year is forecast to be lower than the Pre-Budget Report at 37.1 per cent."

Mr Darling acknowledged that, as in many other countries because of commodity prices, inflation in the UK would rise in the short term as higher oil and food prices fed through. But inflation was forecast to return to target in 2009 and remain on target thereafter.

He announced he was writing to the Governor of the Bank of England to re-confirm that the inflation target for the Monetary Policy Committee remains two per cent on a CPI basis - "entrenching our commitment to low inflation".

And he insisted that the Government’s discipline on public sector pay would help maintain low and stable inflation.

This would ensure the UK entered this period of uncertainty, better placed than any other major economy.

Mr Darling announced: "For environmental reasons we will increase fuel duty by 0.5 pence per litre in real terms from 2010."

But he said he would postpone the 2p fuel duty rise, scheduled for April until October "to support the economy now and help business and families".

Mr Darling said: "This year we again expect to spend over £2 billion more supporting our troops on the front line. Including around £900 million on military equipment."

The Chancellor said the Government will bring forward further proposals "to reform housing benefit to ensure that work pays".

Mr Darling stressed that extra investment in public services must be matched by reform.

"This Budget therefore confirms the spending plans set out in last year’s Comprehensive Spending Review, and makes an assumption for continuing real growth in public spending after 2011 at a rate of 1.9 per cent a year."

He added that the test for public services in the future was "whether they are as good as they can be."

Mr Darling said: "If we are to build a fairer future for our children then we must eradicate child poverty in Britain."

He said the key to this was helping more parents into work. He announced from October 2009, "we will change the rules for Housing and Council tax benefit so that parents are better off in work than on benefits.

"As a result, a working family with one child on the lowest income will gain up to £17 a week. This measure will lift 150,000 more children out of poverty."

Mr Darling announced that from April 2009 child benefit for the first child will rise to £20 a week - a year earlier than planned.

Meanwhile, the child element of the Child Tax Credit will increase by £50 a year above inflation for families on low and middle income from April next year.

"This means that a family with two children, earning up to £28,000 a year, will be over £130 a year better off."

And a further £125m would be spent over three years targeting help to those families who need it most.

Overall the Government was investing a further £765 million next year and then a further £950 million the following year to take 250,000 more children out of poverty, the Chancellor told MPs.

He said further action was needed to help vulnerable groups deal with rising energy prices along with a "fairer deal" for the 5 million customers on prepayment meters.

Energy companies should also increase their support to vulnerable customers.

Mr Darling said: "We will work with the companies to take further action on a voluntary and statutory basis - to underpin this as necessary we will legislate."

He said he wanted energy companies to triple the amount they spend on social tariffs for poor and vulnerable customers, to at least £150 million a year.

Mr Darling said in an effort to encourage people to save money he was increasing the ISA investment limit to £7,200 from April with the amount that can be held in cash rising to £3,600.

He added: "I can also announce that the Government will launch the Saving Gateway nationally with the first accounts available to savers from 2010. By contributing to these accounts we will offer incentives to save to up to 8 million people on lower incomes."

Mr Darling said he was taking further steps to help small companies simplify their tax calculations. He added that funds available through the Small Firms Loan Guarantee scheme will be increased by £60 million for the coming year. And from next month the scheme would be extended to small and medium firms.

He also announced a £100,000 rise in the ammount of investment on which tax relief is available under the Enterprise Investment Scheme from £400,000 to £500,000.

The employee share limit for tax relief under the Enterprise Management Incentive Scheme will also increase from £100,000 to £120,000.

"I will also provide a capital fund of initially £12.5 million to specifically encourage more women entrepreneurs," he said.