Chancellor Alistair Darling and Prime Minsiter Gordon Brown

Alistair Darling this afternoon inched his way along a tightrope with electors on one side of his balancing pole and foreign investors in Britain on the other side ready to jump off and see him crash to the ground.

He tried to reassure investors in this country that a Labour Government would tackle the UK’s massive debt, but couldn’t resist a little pre-election Budget sweetener.

Faced with an enormous debt, the Chancellor gaveth as well as taking away.

Anyone who likes a drink or still spends a packet on cigarettes knew he was going to taketh away, so we saw the usual increases in duties on beer, spirits, wine and tobacco. Cider-lovers were hit even harder with a 10 per cent increase above inflation.

These annual increases in taxes won’t shift many votes on election day other than among those publicans calling time. The other traditional cash cow – increases in fuel duty – will be milked rather less hard than previously announced. Instead of a 3p rise next month, duty will go up by 1p with further penny increases in October and January 2011. Would a Tory Chancellor change this? We don’t know, but the hard-hit motorist is already paying 120p a litre.

People earning more than £150,000 a year knew that the top rate of income tax was going to rise next April, and employers knew that National Insurance would rise in 2011 – a tax on jobs when we know that the economy will still be in difficulty.

High earners – those paid £100,000 or more – will also face the erosion of their personal tax allowances.

And the Chancellor brought the House down with news of three new tax arrangement agreements to be signed with Dominica, Grenada and – Belize where controversial Tory vice-chairman Lord Ashcroft has his millions stashed.

Joy was unconfined on the Labour benches. Red faces on David Cameron’s side.

At the weekend, Mr Darling assured us that there would be no pre-election giveaways in his third Budget, but he still managed to come up with one – a rise to £250,000 in the stamp duty threshold on house purchases.

Whether saving up to £2,500 will make first-time house buyers change their voting intentions is also doubtful, but this idea – proposed by the Tories three years ago before the financial crash – is a welcome boost for the still-sluggish homes market.

David Cameron couldn’t help pointing out that the only new policies in the Budget had come from the Conservatives.

And, remembering his precarious position on the tightrope, he said this would be paid for by raising to five per cent stamp duty on homes costing more than £1 million.

Today Mr Darling managed to cheer up Labour MPs, and he won’t have upset too many voters on low and middle incomes so politically it will be seen as a skillful package. But today’s Budget doesn’t mean that the markets will be pleased. It might not be enough to stop those vital foreign investors from letting go of that pole.

By John Hipwood