CASH-strapped schools and pensioners in North Yorkshire have been handed a multi-million pound Budget boost - paid for by the axing of thousands of Government jobs.

Chancellor Gordon Brown found an extra £100 for pensioners who have been hit in the pocket by record increases in council tax bills.

It will be paid as part of the winter fuel allowance - taking the total to £300 for over-70s and £400 for over-80s.

Mr Brown also pledged an extra £55,000 for the typical primary school and £180,000 for the average secondary school in York and North Yorkshire in 2005/6.

In England, outlay per pupil will rise from £4,500 this year to £5,500 by 2007/8, twice what it was in 1997, Mr Brown said.

In his eighth budget, he said massive efficiency savings would release an extra £20 billion for investment in public services.

He announced plans to shed more than 40,000 posts, including 30,000 from the Department for Work and Pensions.

Some 10,500 jobs will go through the merger of the Inland Revenue and Customs and Excise. The Department for Education faces a cut of 1,400, almost a third of its HQ staff.

The Chancellor was able to herald a freeze on a range of taxes as he declared that Britain had not had it so good for 200 years.

He announced that he would be holding rates on vehicle excise duty, corporation tax, capital gains tax, betting duties, stamp duty and the climate change levy.

On inheritance tax, he said that he would not only freeze rates, but raise the threshold to £263,000 - ensuring that 95 per cent of estates will pay no duty.

The annual increase in petrol duty would be delayed for six months. But there will be an annual inflation rise of 1p on a pint of beer from Monday and 4p on a bottle of wine.

Duties on cider and sparkling wine are to be frozen and spirit duty will be frozen for the remainder of this Parliament.

Duty on a packet of cigarettes is to rise by 8p.

Mr Brown added the economy was on course to meet his forecast of growth of three per cent to 3.5 per cent this year and next, easing back to 2.5 per cent to three per cent the year after.

To loud Labour cheers, Mr Brown told the Commons: "I can now report that Britain is enjoying its longest period of sustained economic growth for more than 200 years - the longest period of sustained growth since the beginning of the industrial revolution."

He said the UK, despite Tory claims that he had been incautious, had met his forecasts for growth which was 2.3 per cent last year.

Updated: 12:09 Thursday, March 18, 2004