Chancellor of the Exchequer Gordon Brown announced a budget that directed money to health care, transport and education to position his party for a possible general election next year.

NHS spending will rise to £54.2bn in.2000-2001, to £58.6bn in 2001-2002, £63.5bn in 2002-3 and £68.7bn in 2003-4

More 16 year olds will benefit from with maintenance allowance worth up to £30 a week.

Children's tax credit will rise to £442 next April and there is a total of £300m for new investment in schools. In April, 3,500 secondary schools will receive between £30,000 and £50,000.

There is an extra £280m available for transport;£285m available to fight crime; tobacco taxes to rise by 5% above inflation, all extra revenue to go to the NHS; new measures to tackle tobacco smuggling; wine to rise by 4p a bottle; beer to rise by 1p a pint - but duty on spirits is frozen.

The Chancellor gave a glowing picture of the economy since the Labour Party came to power in 1997, saying inflation was low and under control and stepping up forecasts of economic growth.

"Britain has been growing steadily while meeting inflation targets," Brown said.

He predicted Britain would experience economic growth in the coming year of 2.75-3.25 percent, nearly double the figure forecast a year ago.

Brown said GDP (gross domestic product) growth would be 2.25 to 2.75 percent in the following two years in line with his earlier predictions.

He forecast the current budget surplus for 1999/00 would reach a massive 17 billion pounds ($26.72 billion) while the public sector net borrowing level was a record surplus of 12 billlion pounds ($18.86 billion) rather than a deficit of 3 billion pounds ($4.72 billion) as previously forecast.

Hours before Brown started his speech, the Office for National Statistics said inflation minus volatile home loan payments rose 0.4 percent on the month to stand 2.2 percent higher in the year to February, up from 2.1 percent in the previous month but still well below the government's 2.5 percent target.

Brown's budget was designed to appease Labour Party activists and woo voters in middle England. It set out the economic territory on which the government will fight the next general election, which could be in about one year's time.

"Amid the risks of an uncertain and often unstable global economy, we are determined to maintain our disciplined approach; determined not to make the old British mistakes of paying ourselves too much today at the cost of higher interest rates and fewer jobs tomorrow," Brown said.

"Britain does not want a return to boom and bust."

Analysts said the budget had few major surprises and looked set to keep Britain's economy moving ahead steadily.

"Obviously we need to look at the specific measures and how they all add up, but so far on the surface of things it's steady as she goes and there's nothing too much for the markets to concern themselves about," said Fraser Coutts of 4CAST economic analysts.

Brown, making his fourth budget speech, pledged to reduce capital gains tax for business assets from 40 percent to 10 percent after four years.

He announced incentives to encourage business to move on to the Internet and to adopt e-commerce dealings.

"I want to make Britain the best environment for e-commerce and catch up with America as swiftly as possible," Brown said.

He gave out cash to pensioners, poor families and small businesses but raised tax on buying expensive houses.

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