| Chancellor of the exchequer Gordon Brown leaves Downing Street with the budget in a despatch box. (Reuters)
London, March 16 (Reuters): Britain's powerful finance minister Gordon Brown set the stage for a May general election today, using his annual budget to trumpet the strong economy and press voters for an unprecedented third Labour term.
Delivering his ninth, and possibly last, budget, Brown painted the economy as the jewel in Labour's crown, positioning himself as the champion of working families and heir apparent to a flagging Prime Minister Tony Blair.
'Britain today is experiencing the longest period of economic growth since records first began in 1701,' he told a packed House of Commons. During a 50-minute speech, he said Britain was growing faster than other developed nations, with inflation and interest rates at their lowest levels for three decades.
With just six weeks left before an expected May 5 polling day, Blair's top aide and rival for power unveiled a budget designed to galvanise Labour's lacklustre campaign.
He announced tax breaks for the poor, the old, young families and first-time home-buyers and pleased the powerful transport lobby by freezing petrol duties.
Economists said the budget was a prudent pre-election pitch carrying few surprises. Financial markets barely budged. 'Much as expected ' if anything, on the conservative side in terms of the amount of money he's giving away,' Mark Miller of HBOS Treasury Services said.
Brown hit out at the opposition Conservatives, arguing their planned '35 billion of spending cuts would damage public services. The Centre-Right Conservatives say their cuts are targeted at government waste and bloated bureaucracy.
While few predict a Conservative election victory, all sides agree they have stolen a march on Blair in campaigning, with the Premier so far looking flat-footed.
Conservative leader Michael Howard dismissed Brown's proposals as a 'vote now, pay later budget' and predicted it would be his last.
'This budget is not about what's good for our country. It's all about the interests of the Labour Party,' he said.
Brown is seen as Prime Minister-in-waiting but some analysts believe Blair could turn against his rival and shunt him out of the treasury if he wins a big mandate.
Either scenario could bring down the curtain on the second-longest serving Chancellor of the last 100 years.
In other voter-friendly moves, Brown unveiled only minimal, inflation-driven rises in 'sin taxes' on tobacco and alcohol.
He also doubled the threshold at which duty on new homes has to be paid from '60,000 to '120,000 in a bid to help first-time buyers hit by soaring house prices.
The stamp duty threshold has not been raised since 1993, but house prices are 140 per cent higher than when the Labour Party won power in 1997. The tax is paid by the buyer at a rate of 1 per cent on houses up to '250,000, 3 per cent up to '500,000 and 4 per cent above that.