Chancellor Alistair Darling holds up his ministerial red box on the steps of 11 Downing Street, London, accompanied by his wife Margaret, before heading to the House of Commons

Chancellor Alistair Darling turned the screw on the well-off today as he gave a helping hand to first-time buyers in his pre-election Battle Line Budget.

He announced a doubling of the stamp duty holiday for house sales from £125,000 to £250,000 from midnight – to be paid for by the rich with a five per cent increase in the duty on properties worth over £1 million.

But he delayed the full impact of the planned increase on petrol.

Instead, the price for a litre of unleaded or diesel will increase by 1p next month, rising by the same again in October and next January.

But as usual there was harsh medicine for smokers and drinkers who were clobbered with increased duties on beer, wine, cider and spirits in a bid to boost Treasury coffers.

The price of cider will rise by 10 per cent and all other alcoholic drinks by two per cent from midnight on Sunday, while the cost of a packet of cigarettes and tobacco will go up by one per cent, then two per cent in subsequent years.

An increase in VAT from 17.5 per cent was ruled out, as well a further hike in income tax on top of the 50p top rate already announced for next month.

But Mr Darling defended the decision to put up National Insurance by 1p, which will hit everyone earning about £20,000 or more.

To woo the elderly vote, he announced that from April, every pensioner would be entitled to £132.60-a week.

Under pressure to convince the markets that he was serious about tackling the biggest deficit in Britain’s peacetime history, he had repeatedly promised a “sensible, workmanlike” package of measures, with none of the traditional giveaways.

There were no big announcements on public spending cuts.

Mr Darling said the Government’s plans to halve the deficit over four years through taxes, cuts to public services and economic growth remained unchanged, and he guaranteed to protect public spending for health, policing and schools.

To start cuts now would “pull the rug from under the recovery” and risk people’s jobs and incomes, he said.

“We have worked too hard as a country to come through this recession to throw it away now,” he said.

Mr Darling said “tough choices” were ahead, but in what appeared to be a direct attack on Tory proposals he pledged to bring down the national debt without damaging public services and the fragile economic recovery.

He said the UK economy had contracted by six per cent during the recession, but at the heart of his Budget was a £2.5 billion growth package. He said it would “secure the recovery”, “support the industries” and “allow the talent of the British people to flourish”. Mr Darling revealed the amount the country will have to borrow to stay afloat would be lower than the £178 billion expected by £11 billion – to £167 billion.

With higher tax revenues and lower than expected unemployment and borrowing, measures to boost jobs and skills for young people and extra help for businesses were also unveiled.

He promised extra help for people who want to work longer and to extend the jobs and training guarantee for 18 to 24-year-olds within six months of becoming unemployed to March 2012. And he announced a cut in taxation to help half a million small firms expand and grow, 345,000 of which he said would pay no business rates.

The Chancellor also promised £4 billion for operations in Afghanistan in recognition of the “courage, commitment and professionalism” of Britain’s armed forces.

He said a 50 per cent tax on banks had already raised more than £2 billion, and promised extra long-term reforms to prevent excessive risk-taking.

Mr Darling also confirmed plans for a basic bank account for every adult. The Government believes an extra 400,000 “green jobs” can be created during the next five years in the drive to cut Britain’s carbon emissions.

Tory leader David Cameron accused the Government of making “a mess of the economy” and branded the statement as a Budget of “debt and waste”.

He said: “We need a Conservative government to clean up this mess.

“Britain doesn’t need this Prime Minister or that Chancellor.

“It needs new energy and leadership to get this country going again.”

By London Reporter

Sunita Patel