Mr Brown said unemployment was at its lowest level since 1979, long term unemployment at its lowest level since 1978.

The Government was close to achieving its target of moving 250,000 young people from welfare into work.

Mr Brown told MPs that since 1997 inflation had averaged 2.4%, interest rates 6%, mortgages 7% and growth 2.7%.

"We have steered a course of stability but we are not satisfied long term prosperity for all is our objective, achieving in this decade, full employment, higher education for the majority of young people, sustained improvements in our public services and with an end to child and pensioner poverty, we want to see all citizens sharing in rising prosperity."

Britain needed to reach American levels of productivity growth, he said.

Unveiling a package of measures to encourage entrepreneurship and make Britain the best place in the world for multinational companies to locate, Mr Brown said the Government would build on the cut in corporation tax.

Ministers would consult on three major changes: to abolish from 2001 the withholding tax, not only on international bonds; to relieve tax on substantial shareholdings by companies; and tax relief for intellectual property and goodwill.

Mr Brown said it had been put to him that North Sea oil companies earning higher profits should be subject to "special taxes".

But he insisted: "I am determined not to make short term decisions based on short term factors."