Chancellor Gordon Brown today sprang a final Budget surprise with a 2p cut in the basic rate of income tax.
Delivering his 11th - and almost certainly last - annual financial statement he said that the basic rate would be reduced from 22p in the pound to 20p from April next year.
There was also a £14 billion increase in spending on schools which will rise from £60 billion to £74 billion by 2010.
While the basic rate of income tax will come down, there was a sting in the tail with the abolition of the lowest 10p rate from 2009.
In other measures, intended to set the stage for his expected takeover at No 10 when Tony Blair steps down later this year - he said that 600,000 pensioners would be taken out of tax altogether.
Child benefit will go up, corporation tax will be cut from 30p to 28p, while education spending will hit the highest level ever, the Chancellor said.
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