Gordon Brown, the UK finance minister, yesterday targeted pensioners, parents and first-time housebuyers in a pre-election budget that had little room for large giveaways in the face of tight public finances.

Less than two months before a general election, expected in May, the finance minister found money for key voter groups by reallocating funds raised from business.

He promised a payment of £200 (€287) next year for each pensioner household in addition to the winter fuel payment that pensioners already receive, in an attempt to match opposition Conservative Party proposals targeting the "grey vote".

A rise in the threshold for payment of housing tax on property purchases, from £60,000 to £120,000, will reduce the tax burden for people buying their first homes.

Working parents will get an increase in tax credit.

Mr Brown stressed his record of financial prudence, saying the impact of this budget - for the financial year beginning on April 6th - would be to raise more money for the Treasury - uncharacteristic for a pre-election budget.

The extra funds would be raised through a crackdown on avoidance of value-added tax on goods and services, stamp duty and corporation tax that should contribute an additional £660 million to the Treasury.

Mr Brown also boosted his coffers by £1.1 billion by changing the North Sea corporation tax rules.

Oil companies currently pay corporation tax each quarter in a move that straddles the end of the fiscal year, but will now be required to make payments every four months, in July, October and January, the Press Association news agency reported.

Michael Howard, conservative leader, said: "What this chancellor gives with one hand, he takes with the other."

Britain's longest-serving finance minister in modern times left his economic growth forecasts unchanged, defying critics such as the Bank of England which continue to maintain his prediction of 3 to 3.5 per cent economic growth this year is too optimistic.

But Mr Brown said he had locked in financial stability for the British economy, which had now grown for the 50th quarter in a row.

"Today Britain is strong among our main competitors whereas in the early nineties we were weak," he said.

The finance minister also insisted he would meet his fiscal rules, but had to admit that his room for manoeuvre had narrowed.

His cushion on meeting the golden rule - to borrow only to invest over the economic cycle - had narrowed from £8 billion, in the pre-budget report in November, to £6 billion.

But the theme remained that of vote-winning sweeteners: other policies aimed at the elderly included the promise of free local bus travel and continued pension payments during a stay in hospital.

A promise to fund the rebuilding or modernisation of at least half the primary schools in England is intended to appeal to parents.

As expected, the finance minister froze duty on spirits and sparkling wine.

He also deferred a planned rise in the fuel duty until the autumn in the light of soaring oil prices.

However, he made small increases in duty on beer, wine and cigarettes.

In measures aimed at pleasing business, Mr Brown said he would reduce the number of industry regulators from 35 agencies to nine.

Public sector inspectorates would be cut from 11 to four. The Inland Revenue (taxation department) and Customs & Excise would also consult on a single tax account for small business, a single point of contact for both VAT and corporation tax, and flexible payment options. - (Financial Times Service)