BRITISH Chancellor of the Exchequer, Mr Gordon Brown, yesterday offered a new deal" to Britain's young and long-term unemployed as he unveiled his people's budget for Britain's future."
But Britons were bracing themselves for a further rise in interest rates after a budget statement which left tax rates untouched, and failed to satisfy widespread concerns about the continued strength of consumer spending in an over-heating economy.
Those hoping for a radical budget were disappointed as the Chancellor decided against scrapping mortgage tax relief (MIRAS), cutting it instead from 15 per cent to 10 per cent with effect from next April. But in an attempt to curb the current housing boom, Mr Brown raised stamp duty on property sales at the higher end of the market, with a 1 per cent increase on sales over Pounds 250,000 sterling and a 2 per cent rate on sales over Pounds 500,000.
Declaring "stability" as his goal, Mr Brown said prices should not be allowed to spiral out of control, and that they should never return to "the speculation, instability and negative equity" of the previous years.
The Chancellor also announced the release of Pounds 900 million over two years to enable local authorities to undertake a building and repair programme, as part of a long-term strategy to increase the stock of affordable rented accommodation.
As expected, the windfall levy of almost Pounds 5 billion provided the centre piece of Labour's first budget in 18 years, with Mr Brown allocating Pounds 3.5 billion for Labour's much-heralded "welfare to work" programme.
The Chancellor also delighted Labour MPs by announcing an extra Pounds 1.2 billion for the National Health Service, and an extra Pounds 1 billion for education to be allocated from the reserves. With a Pounds 1.3 billion surplus from the windfall levy to fund a school building and repair programme, the extra Pounds 2.3 billion for schools overall enabled the Chancellor to say Labour had acted immediately to honour its manifesto commitment.
The Education and Employment Secretary, Mr David Blunkett, will today detail the "welfare to work" plan under which those aged between 18 and 25, who have been unemployed for more than six months, will be offered a choice of the following:
. A job with an employer, who will be given a Pounds 60 per week subsidy;
. Work with a voluntary organisation for six months;
. Work with an environmental task force;
. Full-time training or education.
Confirming the government's tough approach, Mr Brown said there would be "no fifth option to stay at home on benefit".
But as Mr William Hague, the Tory leader, accused the government of breaking its tax promises, doubts continued about the long-term effect of the job training programme.
While the government promised lone parents that the first Pounds 100 cost of child care would be disregarded, it appeared benefits to lone parents would fall.
