Cash-strapped schools and pensioners in Sussex have been handed a multi-million pound Budget boost - paid for by the axing of thousands of Government jobs.

Chancellor Gordon Brown found an extra £100 for pensioners who have been hit in the pocket by record increases in council tax bills.

It will be paid along with the winter fuel allowance - taking the total to £300 for over-70s and £400 for over-80s.

Those looking to move up the property ladder were given a fillip when Mr Brown announced he was freezing stamp duty.

At the same time, the Chancellor acknowledged 175,000 new homes needed to be built each year to help make housing more affordable.

But education, science and enterprise were the main themes of a Budget that business wanted to be as "boring" as possible. Schools, universities and colleges around the UK will get an £8.5 billion boost between next year and 2008.

Mr Brown pledged an extra £55,000 for the typical primary school and £180,000 for the average secondary school in the county in 2005/6.

In England, outlay per pupil will rise from £4,500 this year to £5,500 by 2007/8, twice what it was in 1997, Mr Brown said.

That is the year when schools face their biggest costs in implementing the national agreement aimed at reducing teachers' workloads.

Mr Brown told MPs: "To be a world economic leader in the new global era, we must make the necessary investment in science, education and enterprise."

In his eighth Budget, he said huge efficiency savings would release an extra £20 billion for investment in public services.

He announced plans to shed more than 40,000 posts - including 30,000 from the Department for Work and Pensions.

Some 10,500 jobs will go through the merger of the Inland Revenue and Customs and Excise. The Department for Education faces a cut of 1,400 - almost a third of its HQ staff.

The Chancellor was able to herald a freeze on a range of taxes as he declared Britain had not had it so good for 200 years.

Mr Brown has not earmarked any other department for specific job cuts but he did say all departments would have to cut their administration budgets by at least five per cent in real terms by 2008.

He announced he would be holding rates on vehicle excise duty, corporation tax, capital gains tax, betting duties, stamp duty and the climate change levy.

On inheritance tax he said he would not only freeze rates but raise the threshold to £263,000 - ensuring 95 per cent of estates would pay no duty.

The annual increase in petrol duty would be delayed for six months.

But there will be an annual inflation rise of 1p on a pint of beer from Monday and 4p on a bottle of wine.

Duties on cider and sparkling wine are to be frozen and spirit duty will be frozen for the remainder of this Parliament. Duty on a packet of cigarettes is to rise by 8p.

Mr Brown said the economy was on course to meet his forecast of growth of three per cent to 3.5 per cent this year and next, easing back to 2.5 per cent to three per cent the year after.

To loud Labour cheers, Mr Brown told the Commons: "I can now report that Britain is enjoying its longest period of sustained economic growth for more than 200 years - the longest period of sustained growth since the beginning of the Industrial Revolution."

He said despite Tory claims he had been incautious, the UK had met his forecast for growth, which was 2.3 per cent last year.

The Chancellor said Britain had now outperformed Germany, Japan, Italy, France, the Euro area and the US on growth in the last four years.

He said the Treasury would not revisit the five economic tests for joining the euro this year but he left open the option of a referendum before the next General Election.

Mr Brown said Britain would maintain a rising level of pension credit rather than link pensions to earnings.

The Government was able to afford all existing commitments, including involvement in Iraq, Afghanistan and the fight against terrorism amounting to £6 billion, and to set aside £1 billion next year as a reserve.

Steven Gauge, director of Sussex Enterprise, said: "We strongly support the Chancellor's view that we need more housebuilding.

"There are several businesses in Sussex who cannot recruit the people they need for their business to grow because they simply cannot afford to live here. More housing is needed but has John Prescott got the political credibility to take on the Nimbys who are standing in the way of economic growth?

"This was a low-key Budget with little good news for businesses. Gordon can't take continued economic growth for granted. Sussex businesses needed to hear more about investment in transport and cutting red tape.

"We need real action to speed up the planning system to unlock sites for development. The Chancellor has presided over a sustained period of stable economic growth and his economic forecasts are better than Robin Cook's betting tips but he might need to sort out his next job pretty quickly before his luck runs out."

TUC general secretary Brendan Barber said: "This steady-as-she-goes Budget strikes the right note. The Chancellor has seen off his critics, who were predicting cuts in public expenditure or increases in tax.

"Public services still need sustained investment and we welcome the big boost to education.

"We welcome the extra cash for pensioners, though still more needs to be done.

"However, the announcement of civil service job losses had more to with shooting the Opposition's fox than acting as a responsible employer.

Alan Beale, tax specialist and partner at Baker Tilly's Brighton office, said: "It is a shame he hasn't done anything more exciting.

"There were no surprise announcements despite excellent growth in the economy, low interest rates and economic stability.

"The general view is that this year's Budget resembles more of a party political broadcast than a budget, as he didn't talk very much about tax."

Thursday March 18, 2004