Chancellor of the Exchequer Alistair Darling gave his pre-Budget speech to the House of Commons today, in what was a closely watched performance after Labour’s recent "to be or not to be" election fiasco.

Darling announced that the amount of child maintenance a family can receive without it affecting their benefits will double from £20 a week to £40 a week by 2010. Pension credits will rise by £5 a week from next April for single people and £7.65 for couples.

The inheritance tax threshold for couples will rise to £600,000 and then to £700,000 by 2010.

He promised to reform the capital gains tax system, so that people working in private equity pay a "fairer share", with a single rate of 18 per cent for all. The main rate of corporation tax will be cut by 2p in the pound to 28 per cent by 2008.

The Chancellor attacked Tory leader David Cameron’s claims that his party would generate £3.5bn annually by targeting non-domiciled taxpayers, stating that the actual figure would be more like £650m per year.

An extra £400m was allocated for military operations abroad this year, as well as a £1bn per year increase over the next three years to tackle terrorism. Spending on the Home Office is set to increase to £20bn by 2010, and the overseas aid budget will rise to £9bn in the same period.

Darling said that now is a time of "increased economic uncertainty" with "turbulence in America, Asia and Europe", and stressed that there would be "no risks with unaffordable promises that put the public finances at risk".

UK economic growth is now forecast to be between 2 and 2.5 per cent in 2008/09 and 2.5 to 3 per cent in 2009/10. Darling claimed that the UK Government would keep net debt at a sustainable level during the next economic cycle. Net borrowing is forecast to fall from £38bn this year to £23bn in 2012.

Darling added the UK was the only country to have met its Kyoto greenhouse gas emissions targets.

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