It can’t be easy being the Chancellor. Especially one that is having to steer a path for the economy through two global problems not of our own making.

The first is the world wide credit squeeze. Bankers around the world, in the search for bigger and bigger profits, took on risky debts made up of US mortgages. In the UK if you can’t pay the mortgage and you hand over your property to the bank you are still committed to paying them the difference between what they sell your house for and what they loaned you in the first place. In the US if house prices fall and you can’t pay your mortgage you can simply give the keys back and the bank cannot chase you for their losses. That means when times are tough people default on their mortgages in big numbers and the banks, who owned these debts, lost their money.

Unfortunately, no-one knows exactly who these banks holding these worthless mortgages are. So US banks have stopped lending to other US banks in case they were insolvent and once it became clear that some of these mortgages were now held by international banks the credit squeeze spread around the world, ultimately leading to the collapse of Northern Rock.

The other problem Mr Darling had to face up to is global inflation. As China and India have expanded we and the other developed nations have bought cheap goods from them and paid for them by selling our services around the world. Now the economies of China and India have grown to a size that their demands for energy and raw materials are pushing up world prices for commodities that we rely on too.

So what was he to do? First of all budget 2008 had to ensure that our own economy could continue to grow. We are the only country in the developed world not to have faced a recession in the last ten years because our affairs have been so well managed and he had to make sure that solid foundation remained in place.

Secondly, the pressure on world prices is short term but if we all ask for big pay rises to meet those increased prices then the inflation that follows will be long term. That means he had to try and put money into the pockets of people on low and fixed incomes to protect them from the rising prices and so that he can encourage us to keep wage demands under control. Hence Child Benefit has been raised to a record level and the winter fuel allowance for older people has gone up by £50 for the over 60s and by £100 for the over 80s, helping about 30,000 households in my South Thanet constituency alone.

It was a tough balancing act that he had to strike, but strike it he has. Unlike the budget demands of the other Parties nothing in the real budget was uncosted or unreasonable and nothing was for show. He made every penny count.