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Mr Darling said that Britain's openness, alongside all economic and labour market reforms have helped keep inflation low, while enabling the economy and employment to grow, and make Britain the number one destination for inward investment.

However, he criticised countries that put up trade barriers to ward off British approaches abroad. "Across the world, investment needs to be a two way process. So just as we welcome investment here, there needs to be a level playing field for British investment overseas. Openness should be a commitment by all. Free trade should be just that."

"And looking forward for Britain, we must invest in the areas that will drive growth tomorrow. And new research shows Britain is investing as much in the intangible assets that are essential to equip ourselves for change in the new global economy - in innovation and intellectual property, in software and skills - as we are in more traditional physical assets. Indeed it suggests Britain is investing up to a quarter of its income in its future."

"Now whilst we have good reasons to be confident about the future, other countries are raising their game. After years of sluggish growth, the euro area is now growing more strongly. The governments in Germany and now France are committed to economic reforms. China and India and other developing countries are no longer just low cost low skill producers, but with growing middle classes of their own - by 2020 larger than the total population of America and Europe - they are developing their own domestic markets and raising their own skills."

"Crucially all this brings opportunities for us. The euro area is our main trading partner and we are seeing benefits in our exports of its renewed growth. A wealthier China and India will become bigger markets for the high value added goods and services in which we are already world leaders," Mr Darlin said.

He said that the Treasury will continue to play a leading part in this commitment, not just as a finance ministry but, working with the rest of Government, as an economics ministry. He reiterated the government's commitment to further simplification of the tax system, reforms to the planning system, simplifying support to businesses so it better helps them innovate, invest and grow and ensuring that the UK's business tax rates and regime remain competitive.

Alastair Darling said bold leadership is needed to restart international trade negotiations. "Previous rounds have benefited us all. So could this one, lifting millions out of poverty and securing billions of dollars in extra growth. So the latest stalling is a big disappointment. It risks further calls for populist protectionism."

He announced that the conclusion of the long-awaited Comprehensive Spending Review (CSR) will be announced along with the Pre-Budget Report in October.

The Chanchellor announced an annual increase in infrastructure investment to £60 billion by 2011, with investment in flood defences increasing to £800 million a year. Investment in education will increase every year to over £74 billion in England alone by 2011, while public investment in science will increase to over £6 billion by 2011.

Darling reconfirmed the goverment's intention to honour the long term funding guideline of two and a quarter per cent in real terms for transport. However, he again refused to commit to extra spending on Crossrail. "It is very expensive and before we can make a decision we need to make sure it's affordable. And that will mean substantial contributions from outside Government as well as Government itself," according to Darling.