CHANCELLOR Gordon Brown presented a "wait and see" Budget today with good and bad news thinly spread.

He faced up to the '3 billion costs of the war in Iraq and told smokers, drinkers and motorists: Your country needs your cash.

Mr Brown announced an extra '330m for counter-terrorist measures in Britain, including extra detection work in ports and airports.

In his seventh Budget, delivered three hours earlier than traditional, Mr Brown tried to balance the books as he admitted that his growth forecasts of up to 3 per cent had been over-ambitious - and he reduced it to 2-to-2.5 per cent.

But, forecasting an upturn in fortunes, Mr Brown predicted that growth would rise by 3-to-3.5 per cent in 2004-5. The Chancellor also said that borrowing would have to rise from '24 billion to '27 billion to plug the gaps.

Confidence

With Mr Brown forecasting a return to world-wide confidence after the Iraq war, it was a "wait and see" Budget.

He confirmed he would go ahead with investment in public services and introduce new measures to promote jobs - especially in regions such as the North West.

The Chancellor said there would be more cash help for firms in the regions, more public sector jobs would go to the regions, and local councils would be allowed to keep the business rates for new businesses they attract.

He increased taxes - 8p on a packet of 20 cigarettes, 1p on a pint of beer and 4p on a bottle of wine - from Monday, but for the sixth Budget, he froze the duty on spirits. In recent days, his increase in national insurance contributions has kicked in.

Fuel duty will not increase for six months because of the prospect of petrol prices rising after the Gulf war, which will produce more revenue for the Treasury, but there was an increase of '5 in car tax.

There was good news for pensioners: From October, all single pensioners will get a pension credit of '14.79p a week, couples '19.20 a week, an extra '9 and '7 respectively, if they have income below a minimum, and winter fuel payment, now '200, will go to '300 for two million men and women over the age of 80.

Stability

Summing up his Budget, Mr Brown said: "This is a Budget meeting our responsibilities at home and abroad, steadfast for stability, enterprise and full employment, tackling inequality, renewing public services.

"A Britain of economic strength and social justice."

There will be more for education, health, law and order and transport, aimed at placating Labour MPs angry about the decision to launch an attack on Iraq and lining up for another row over plans for two-tier Foundation hospitals.

Stamp duty on house sales was frozen.

The threshold for inheritance tax, which has angered many middle England families, is to be increased slightly by '5,000 to '255,000. The Chancellor pointed to the swift success of the war as a spur to a return of world-wide confidence and an upturn in trade.

Admitting that they were sailing through rough waters, not least because of the costs of war and the bleak world economy, Mr Brown's message was they would soon be in calmer seas - avoiding the need to raise taxes.

He boasted that inflation and interest rates were at a historic low and jobs at a record high.

The upbeat forecast defies the prophets of doom, who insist that Mr Brown will be forced into big tax rises to pay for his spending plans.

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