Upbeat Brown helps elderly and NHS

Chancellor Gordon Brown today delivered an upbeat assessment of the British economy - and handed out help to pensioners, the health service and environment-friendly fuel schemes.

Chancellor Gordon Brown today delivered an upbeat assessment of the British economy - and handed out help to pensioners, the health service and environment-friendly fuel schemes.

Mr Brown told MPs in his 35-minute pre-Budget statement that Britain's economy was set to grow by 1.75% this year - 0.75% up on predictions - and by 2.5% to 3% next year.

But he added: "Having come this far we will not relax our discipline."

The Chancellor told the Commons that "we are on course to balance the current budget over the (economic) cycle".

So Mr Brown unveiled a series of announcements. He began by confirming long-expected announcements on capital gains tax, reducing the level of tax on profit from investments from 40% to 22% for investors over three years and down to 10% over five years.

But he surprised MPs with an announcement that for pensioners, this year's £100 winter allowance would be paid every year and that those over 75 would no longer have to pay the £101-a-year TV licence.

On the health service, Mr Brown announced that for every 5% "real terms rise in cigarette duties" the NHS would receive the funds recouped direct, equivalent, he said, to £300 million-a-year "which could start next April".

Mr Brown said environment-friendly fuel would be encouraged by incentives for renewable energy sources and combined heat and power schemes that would mean an exemption for them from the so-called climate change levy, leading to a 90% reduction in charges.

The Chancellor also sought to placate the car-user lobby by announcing that he would abolish the pre-determined fuel escalator scale of charges on petrol and make decisions "Budget by Budget".

He added that if there were any "real term rises in road fuel duties they will be lower and the revenues will go straight to a ring-fenced fund for the modernisation of roads and public transport".

Mr Brown also announced that the New Deal for the unemployed would be extended for the first time to all unemployed in every part of the country.

That means they would either be offered a job, help with self employment. retraining of college training.

Benefits are likely to be withdrawn from those who do not go along with the scheme, although Mr Brown did not spell that out.

"This Government is demonstrating that enterprise and fairness can go hand in hand. This Government's work for Britain has only just begun," Mr Brown told the crowded Commons.