Budget: Capability Brown puts the family first

And as drinkers toasted the Chancellor's freeze on alcohol duty and motorists gave a guarded welcome to cuts in fuel duty and vehicle tax, the health service and schools were celebrating after major increases in funding.

The Chancellor, who has set himself up as the children's champion, estimated the average household would gain £240 a year.

Shaun WoodwardWitney Labour MP Shaun Woodward said the most striking element of the 52-minute speech was the announcement of £800m extra for teacher recruitment, school repairs and headteachers' budgets.

He said: "This is a serious increase in funding and schools in Oxfordshire will welcome it. In terms of this Government making education a priority this substantial extra money will make a substantial difference.

"This Budget will help those who need help the most - families with children, working families and pensioners. The extra resources going into schools and the health service will make a real difference. "The Chancellor has produced a Budget with vision. It has a view for the long-term."

Shereen Kamali, Labour education spokesperson for Oxfordshire County Council, said: "Headteachers will welcome the increase in the level of grant going direct to schools.

"Primary schools in Oxfordshire should get up to £28,000 and one should receive £30,000."

Secondary schools will get £82,000 for the three years from April, apart from Icknield, Langtree and Drayton schools, which will receive the same as middle schools - £58,000.

Ms Kamali added: "I am particularly pleased that teacher recruitment and retention is being given funding. In Oxfordshire the Labour Group successfully argued for an action plan. I hope it can be implemented as soon as possible."

Mr Woodward believed the boost for hospital trusts of up to £1m extra each year for three years, along with £135m to recruit more NHS staff would help across the country.

He said: "Businesses in Oxfordshire will, I am sure, most welcome the changes to VAT, with the threshold raised to £54,000 for small business.

"There is also a proposed lower rate for firms with a turnover of up to £100,000. The changes will effectively lift some firms out of VAT altogether and the VAT cut on church repairs to five per cent will also be welcomed across the county." But Liberal Democrat MP for Oxford West and Abingdon Evan Harris said Mr Brown had been double counting and his £2bn of extra spending on schools and hospitals was actually only half a billion.

He said: "All of next year's extra spending is simply money he failed to spend this year. He has cut taxes and failed to tackle police shortages, teacher shortages and nursing shortages, which are particularly acute in Oxfordshire."

Steve Goddard, parliamentary spokesman for the Liberal Democrats in Oxford East, attacked the Government's 'lamentable" support for the police.

Speaking after a meeting with Chief Supt David McWhirter, of Oxford police, he said: "It is well known that the police here are having problems, not just recruiting - it is also difficult to keep good officers in the service. This is because of the high cost of living in Oxford and this Government is doing too little to improve the situation."

Business adviser James & Cowper, of Wantage, said firms now had a stronger incentive to reward valued members of staff with more generous share options.

Tax partner David Fawcus said the changes in capital gains tax (CGT) would allow firms to increase the value of shares they can give to employees from £1.5m to £3m on a tax-efficient basis.

He said: "This should be a major incentive for them to attract and retain key staff and develop a platform for growth."

He added that the measures would help lower taxpayers. He said: "The £2bn tax cuts will be closely channelled through the working families tax credits and new child tax credit. Both will have to be administered by employers, which will mean more red tape for them." Mr Fawcus said one of the reasons the Government had been able to make substantial inroads into the national debt and allocate an extra £1bn for schools and hospitals was through the sale of mobile phone licences.

He added: "A lot of this money has come via Thames Valley-based telecom companies. Gordon Brown may pride himself on being a prudent Chancellor, but we shouldn't forget that he has been fortunate in having such a large amount of additional revenue to redistribute."

Gill Kirk, Labour's prospective parliamentary candidate for Oxford West and Abingdon, said the Budget was a "great boost for schools, the NHS, public services and the fight against crime".

She said: "No other Government since the war has done so much for women."

Colin Breed, Liberal Democrat shadow agriculture minister, said the Budget showed Labour has abandoned the countryside and the bonanza would have no impact beyond the suburbs. He said: "The Budget was a prime opportunity to provide short term relief for farmers affected by the foot and mouth outbreak. Badly needed long-term measures, such as an early retirement scheme for tenant farmers, have also been neglected. The Budget is a disappointment for the countryside."

Inez Anderson, a partner at business adviser KPMG, said the increase in the tax credits available to working families with children, including the new Children's Tax Credit and working people with disabilities could only be good news.

But he said: "It seems that many of those eligible to apply for the credits available to date have not yet done so. These increases will raise people's awareness again but it is important that they know how to access the tax benefits. Otherwise, there is a danger that applying for the credits becomes that task on their 'to do' list that never gets done!"

Motoring organisations welcomed the cut in fuel tax and the RAC said the cuts would help the Government start to regain the confidence of motorists.

While welcoming the cuts, the AA said it was disappointing that Mr Brown had not pledged to freeze petrol taxes beyond 2002. Mr Brown said that the price of ultra-low sulphur petrol (ULSP) was being cut by 2p a litre. With ULSP not yet available nationwide, Mr Brown added that the 2p cut would be extended to unleaded petrol until June 14. Ultra-low sulphur diesel is to come down 3p a litre.

As he announced in his pre-Budget statement before Christmas, Mr Brown is extending the £100 lower rate of car tax from all cars up to and including 1200cc to all cars up to 1549cc.

This reduction, in which smaller vehicle owners will pay £55 less than owners of larger cars, will come in in July but be backdated to November 2000.

Mr Brown said five million more cars and nine million in all, including Ford Escorts, Vauxhall Astras and Nissan Micras, would now qualify for the lower rate.

The Chancellor also announced that he was replacing the 100 lorry VED rates with just seven and that savings for about 115,000 lorries would be more than £1,000 a year. In addition, from next month vehicle excise duty on all tractors will be abolished.

But the UK coach industry condemned the Chancellor for not extending fuel tax rebate - currently enjoyed by the rail, domestic airline, and local bus services - to coaches. Veronica Palmer, director general of the Confederation of Passenger Transport, said: "Coaches carry millions of people to work, to school and on their holidays, cutting congestion and pollution wherever they go. Many of our passengers are from the less well off sections of society, yet they are forced to pay fuel tax whereas rail and domestic air passengers are exempt."

David Evans, chief executive of the Retail Motor Industry Federation, said while it welcomed any price cut for hard-pressed motorists, the Budget had "totally failed" to recognise advances in engine technology.

He said: "It is disappointing that the Government is not recognising the advance in cleaner technology in engines of all sizes rather than just focusing on smaller engines: it is often the smaller, older, unserviced car that causes the most pollution."