In this my eleventh Budget, my report to the country is of rising employment and rising investment; continuing low inflation, and low interest and mortgage rates; and this is a Budget to expand prosperity and fairness for Britain's families.

Economic statistics
Mr Deputy Speaker, I can report the British economy is today growing faster than all the other G7 economies.

And after 10 years of sustained growth, Britain's growth will continue into its 59th quarter - the forecast end of the cycle - and then into its 60th and 61st quarter and beyond.

Every country has faced a trebling of oil and commodity prices. But while inflation peaked at 4.7% in America and went as high as 3.3% in the G7, in Britain, inflation has never gone beyond 3%, has fallen from 3% to 2.8%, and will fall further this year to 2%.

In the last year investment has grown by 6%, business investment by 7%, with inward investment up 10%. Alongside North America, Britain has the G7's fastest growing business investment. This year business investment is forecast to rise again by more than 7%.

In the last year employment has risen, with 220,000 more men and women in work. And the next stage in this Budget is to do more to equip people with the skills for the jobs of the next decade and beyond.

We expect that next year, in 2008, alongside North America, our growth will again be the highest in the G7 - between 2.5 and 3% - with the same rate in 2009.

Forecasts
Our first fiscal rule is that over the economic cycle, government current expenditures are paid by tax revenues. And in this cycle we are able to report a surplus of £11bn.

Our forecasts of the current balance from 2007-08 to 2011-12 are affected by the sharply lower levels of production and yet higher costs in the North Sea, which have this year reduced tax revenues from £13bn to £8bn and will cut them by an average of £4bn a year.

Even with this reduced revenue, we are on track to meeting the golden rule, with figures from 2007-08 of -£4bn, +£3bn, +£6bn, +£9bn and +£13bn.

And we have also met our second fiscal rule, that debt should be at a sustainable level. Debt is 44% of national income in the US, 50% in the euro area, and 92% in Japan, but in Britain we expect debt from 2007-08 to 2012 to be 38.2%, 38.5%, 38.8%, 38.8% and 38.6% - at all times meeting our second fiscal rule.

Britain's net borrowing is this year just 2.7% of national income. In the future years to 2011-12 it will be 2.4%, falling to 2.0%, and then falling to 1.8%, 1.6% and 1.4%.

The deficit equivalent for this and future years will be £35bn - over £1bn less than forecast at the Pre-Budget Report - then £34bn, £30bn, £28bn, £26bn and £24bn.

Asset sales and savings
In the Pre-Budget Report, I said that from now to 2011, asset sales would release £18bn for front-line services. But because I can announce today the sale of radio and TV spectrum, a £6bn sale of the student loan book, and further financial and corporate sales, asset sales will rise from £18bn to £36 bn.

I have agreed with departments savings in administrative costs worth by 2010-11 £1bn a year, which will also release money for front-line services. The same front-line services will benefit from below-inflation spending review settlements for departments at the centre of government - DWP, HMRC, the Cabinet Office and the Treasury along with DCA and the Attorney-General's departments. With efficiency savings of 3% each year we release, in total, £26bn a year by 2010-11 for front-line services.

Spending plans
In this new spending round our aim has also been to ensure that resources for improving the front-line services, will continue to grow at the 4-4.5% yearly rate of this spending round.

Capital investment in schools, hospitals, security and defence and infrastructure will rise from £43bn this year to £48bn next year and then in successive years to £52bn, £55bn, £57bn, and then £60bn, more than three times what it was in 1997.

Total expenditure which is £552bn this year, will rise by £34bn next year to £587bn, and then rise in 2008 by £29bn to £615bn, rise in 2009 by another £29bn to £644bn, and then in 2010 by an additional £29bn to £674bn.

For the year to come, our budget for security and intelligence, which was just £1bn in 2001, will now be for 2007-08, £2.25bn. I am allocating the secretary for defence an additional £400m.

For the coming year starting next month in April, the money available for investment and reform in the NHS in England will be £8bn more than this year, the biggest cash increase ever, a cash rise of 10% - 7% in real terms. Taking the whole of the United Kingdom, I expect total additional expenditure on the NHS from April to be almost £10bn above last year - a 10% rise.

Global challenges
But it is also right to proceed with major reforms and modernisation that will prepare Britain for all the long-term challenges we face.

To lead in global competition - and particularly to secure our place in the high-value-added, investment-driven growth sectors of the future - Britain must champion an open and inclusive globalisation, not protectionism.

My view is that in all advanced economies, public and private investment in the great new drivers of growth, innovation and education, will need to rise towards 10% of national income. In the next four years. public investment in science will rise from £5bn this year to £6.3bn by 2010-11 - a 25% cash increase.