The British Chancellor of the Exchequer, Mr Gordon Brown, today put his Labour party on a general election footing with a £4 billion sterling family-friendly giveaway budget.
He unveiled a series of measures he claimed would boost standards of living and give children a better start in life.
He also announced £2 billion sterling in tax cuts and a further £2 billion for schools and hospitals.
But there were no big surprises in what is expected to be the last budget before the next general election.
He said 25 million people would benefit from a rise in the threshold, to £1,880 from £1520, for the 10p starting rate for income tax.
The Chancellor announced an increase in maternity pay from £60 to £100 a week by 2003, also extending it from 18 to 26 weeks.
There was good news for fathers too as he confirmed the introduction of two weeks paternity leave at the same rate.
The child tax credit which replaced the married couple's allowance will be raised from £8.50 to £10 a week.
There was also cheer for drinkers and gamblers. Mr Brown said there would be a freeze on duty on beer and wine, as well as spirits. He said duty on cigarettes would only rise by 6p, in line with inflation.
And he confirmed that betting duty was being abolished, to be replaced by a bookmakers profits tax of 15 per cent.
He announced £1 billion sterling cash boosts over the next three years for schools and hospitals.
In education, the cash injection would be used for teacher recruitment, school repairs and headteachers' budgets.
In the NHS, up to £1 million would go directly to each acute hospital trust every year for the next three years, the Chancellor said.
The Conservative leader, Mr William Hague, dismissedgovernment claims that the budget proved Labour was cutting taxes, branding it a "10p up, 1p down pre-election Budget".
Mr Hague compared Mr Brown to "the thief who steals your car and comes back the next day to return the hub caps."
The Chancellor highlighted what he said were his government's economic achievements, promising "prosperity for all in the years to come".
He said that by striking a balance between long-term investment and affordable tax cuts, the government would meet the needs of not just some but all of Britain's families.
The choices Britain had made under Labour had produced the lowest inflation for 30 years, the lowest interest rates for 35 years, more people in work than ever before and the lowest level of unemployment since 1975.
He said: "Because there is still much to do, the stability built in the first years will be our foundation for building opportunity and prosperity for all in the years to come."
Mr Brown disclosed that he expected to see a Budget surplus this year of £16.4 billion sterling compared to the £10 billion he was forecasting at the time of the pre-Budget report in November.
He said that this year the government would be repaying £34 billion of national debt - more than the total repaid by all British governments in the last 50 years.
Despite the slowdown in the world economy, he said that he expected growth to be between 2.25 and 2.75 per cent in 2001.
Inflation is forecast to be 2.25 per cent this time next year, on target for 2.5 per cent by the end of 2002. The inflation target remains at 2.5 per cent.
Mr Brown announced a series of measures to help business and encourage enterprise, promising to consult on the modernisation of corporation tax and extending tax breaks on research and development to larger firms.
He also announced a cut in the long-term capital gains tax rate for all employees to 10p from 40p to help encourage wider employee share ownership.
He confirmed that stamp duty was being abolished in certain areas to help regeneration. He also announced tax breaks on property renovation.
For families, Mr Brown announced that the Working Families Tax Credit would rise by £5 a week from June.
There was also the promise of more help with the costs of childcare for working families.
For motorists, all car tax rates were frozen again and the cheaper £55 rate for smaller cars was extended to an extra 5 million cars - all those up to 1500cc backdated to November.
He confirmed cuts in vehicle tax rates for hauliers and the scraping of the tax on tractors.
Other giveaway measures included:
- a new grant for repairs to places of worship
- a change in VAT to give free museum entrance
- the extension of tax relief for the film industry to 2005
- the raising of the VAT threshold to £54,000 for small business with a proposed lower rate for firms with a turnover of up to £100,000.
- the threshold for Inheritance Tax will be raised to £242,000.
On a tougher note, Mr Brown said the unemployed will have to be interviewed about job opportunities before receiving benefits.
Moving on to the fight against drugs, he said a new two-year £200 million scheme would be distributed among all of the country's 350 partnerships against crime and disorder, police commanders and anti-drugs leaders receiving up to £1 million for their areas.
PA