Gordon Brown yesterday set the stage for a spring General Election as he unveiled a £4bn Budget giveaway.

Tax cuts to help the low-paid and families with children, together with a boost for schools and hospitals, were targeted at Labour's deprived heartlands in areas such as the North-East.

The Chancellor, nevertheless, maintained his reputation for prudence with a balanced package of well-trailed measures, and held back from drastic income tax cuts in favour of £2bn of extra spending on health and education.

There were no big surprises, but the Chancellor aimed to offer something for everybody, without including anything that would frighten the City or the Bank of England.

Middle-income earners with sizeable mortgages will be better off if the Bank of England, as expected, announces a further cut in interest rates today.

This may have been in danger if the Chancellor had cut the basic rate of income tax.

Instead he opted for widening the 10p starting rate from the first £1,520 of taxable income to £1,880. This £1bn across the board cut will benefit all 25 million taxpayers - but particularly the worse-off.

In what he said was a "families first" Budget, Mr Brown announced maternity pay would rise from £60-a-week to £100 by 2003, with paid maternity leave being extended from 18 to 26 weeks.

Fathers benefited too, with a the announcement of two weeks paid paternity leave.

Child tax credit, which replaces the old married couples allowance, will rise from £8.50-a-week to £10, with an additional "baby bonus" of £10 for the first year of a child's life.

The package also included a freeze on duty on spirits, wines and beer while cigarettes will rise by just 6p a packet, in line with inflation.

Betting duty was abolished altogether - and bookmakers will be subject to a 15 per cent tax, which they will not be allowed to pass on to the punters.

He confirmed a 2p duty cut on environmentally-friendly ultra low sulphur petrol, with a similar reduction on unleaded petrol until June 14, when ULSP should be available across the country.

The lower rate of road tax will be extended to cover cars up to 1,500cc and the promised reductions in vehicle excise duty for lorries will also go ahead, with the duty being abolished for tractors.

A series of measures to help business and encourage enterprise in areas like the North-East included more flexibility for Regional Development Agencies to spend money on encouraging enterprise.

Mr Brown said stamp duty was being abolished in certain areas to help regeneration.

He also announced tax breaks for property renovation and urban regeneration companies.

"By striking the right balance today between long-term investments and affordable tax cuts, we not only boost enterprise and savings, but meet the needs of not just some but all Britain's families," Mr Brown told MPs.

Tory leader William Hague dismissed it as a "cynical" pre-election Budget, which would hardly begin to redress the balance after the tax increases announced by Mr Brown in his four previous statements.

The Budget was also attacked for doing little to help struggling farmers.

Phil Willis, Liberal Democrat MP for Harrogate and Knaresborough, said he was "incredulous that given the state of agriculture, there is nothing to support the rural economy".

Ben Gill, president of the NFU, who farms at Easingwold, North Yorkshire, welcomed the decision to drop the proposed pesticide tax, which would have cost farmers an extra £125m a year.

But John Rider, NFU chairman for North Riding and County Durham, said he was disappointed there was not more help on offer to the beleaguered farming industry.

He said: "There appear to be more positives than negatives but there is nothing really major to help us."

Anne McIntosh, Tory MP for the Vale of York dismissed the Budget as a "cynical ploy". The Chancellor was simply redressing some of the "stealth taxes" imposed in the last four Budgets.

However, there was a warm welcome for the Chancellor's speech from North East Labour MPs.

Stuart Bell, Labour MP for Middlesbrough, said: "This is the first time in my lifetime that at 6pm after a Budget I can fill up with petrol and not pay extra tax, go into a pub and buy a pint of beer without paying extra tax, and go into a betting shop and place a bet without paying betting tax.

"This is a Budget for working families.