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"Driven by improved productivity, the UK’s GDP per head – the average income for every man, woman and child – has gone from the lowest amongst the group of seven leading industrial economies in the early 1990s to being second only to the United States last year."

Mr Darling also 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".

Otherwise, Northern Rock barely rated a mention. Because it is being seen as a "temporary problem" Mr Darling has managed to keep it off the books.

He said: "The core purpose of this Budget is stability – now and in the future – and its core values are fairness and opportunity, founded on stability and strength. In every country in 2008, every government has one aim - to maintain stability through the world economic slowdown."

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It was an unexciting Budget, a deliberately dull package, and I think it will be very unpopular

Philip Webster

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Mr Darling said that the Government backed yesterday's decision by top central banks to pump hundreds of billions of dollars into world money markets to alleviate the credit crunch.

"We have seen significant disruption across many credit markets with a number of them barely functioning at all. And since the turn of the year, global stock markets have also been affected," he said.

"This poses a major risk to the world economy and so we welcome yesterday’s commitment by the world’s central banks, including the Bank of England, to address these concerns."

As expected, Mr Darling confirmed that a 2p rise in fuel duty due in April would not now take effect until October to protect motorists already hit by record oil prices. He nevertheless, as a "green" measure, announced a further 0.5p rise in fuel duty in real terms by 2010.

But smokers and drinkers will be hit immediately. Alcohol duties will rise from midnight, putting 4p on a pint of beer, 14p on a bottle of wine and 55p on a bottle of spirits – long immune to increased duty under Mr Brown's Treasury tenure. Cigarettes will also rise by 11p from 6pm tonight.

Mr Darling also gave warning that he would legislate next year to impose a charge on disposable plastic bags unless the retailers took action to curb their use.

On vehicle excise duty, Mr Darling said that low-emitting cars will face zero duty by 2010 and other bands will be introduced to give motorists a greater choice. He also announced a "first-year" tax on new cars – dubbed a "showroom tax" by its critics – to encourage new car buyers to choose lower-emission cars.

Mr Darling promised extra help for "hard-working families", including an increase in child benefit for the first child to £20 a week from April 2009 – a year earlier than planned. He also promised to increase by £50 a year above inflation the child element of the Child Tax Credit for families on low and middle incomes from April next year.

Responding to the speech, Mr Cameron accused the Government of squandering the fruits of economic growth over the past decade. "They didn't fix the roof when the sun was shining."

He said the UK had the highest tax burden in its history and the highest budget deficit in Western Europe. Figures indicating that borrowing would increase by £20 billion over the next four years were "truly dreadful".

He went on: "People watching this Budget will conclude that the Chancellor and the Prime Minister live in an entirely different world from everyone else... The cost of living is going up and Labour is making it worse."

In a separate Budget analysis, the Shadow Chancellor, George Osborne, said that the measures announced today would "add £110 a year to the tax bill for every family" by 2010.

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