HOWZAT

While the Secretary for Work is today strengthening the New Deal with further measures to bring more lone parents and the unemployed into jobs, there is already today a higher proportion of the working age population in employment in Britain than in America, Japan, Germany, France or the whole of the euro area.

And I can report also that the number of people with tax free savings accounts is now over 16 million, in contrast to just nine million under the old system of TESSAs and PEPs, and I can confirm that the tax free advantages of Individual Savings Accounts will continue beyond 2010 and will be made permanent.

In line with independent forecasters we have decided to maintain trend growth at 2.75 per cent while basing our public finances, audited by the NAO as cautious and reasonable, on a rate of 2.5 per cent.

Mr Speaker, as I will show when I give all the fiscal figures in detail, Britain will meet both its fiscal rules in this cycle and also in the next.

So we build for the future from the fundamentals of a recession free decade of stability and growth with low inflation.

And this is the strongest foundation from which to address the great global challenges ahead.

Let me summarise: Asia is already outproducing Europe; China alone is manufacturing half the world's computers, half the world's clothes, and more than half the world's digital electronics and this Christmas, more than 75 per cent of children's toys.

But in the next ten years the competitive challenge is even more profound. Once responsible for just one eighth of the world's growth, China and India will soon capture almost half.

And increasingly they are competing not just on low cost, but on high skills. While every year Britain adds 75,000 engineers and computer scientists, India and China add half a million; and while annually Britain turns out quarter of a million graduates, India and China now graduate four million.

So economies like ours have no choice but to out-innovate and out-perform competitors by the excellence of our science and education, the quality of infrastructure and environment, and by our flexibility and our levels of creativity and entrepreneurship.

And just as in the last decade by planning long term we created a new and enduring British framework for economic stability, so too for the coming decade the task is to think long term again and to create a new British framework for investment and innovation, a British strategy to make the next stage of globalisation work for the British people.

A shared finding of each review we have published is that the investments that Britain must make can only be achieved in a new era of shared responsibility and partnership between private and public sectors.

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