The money for schools has been squeezed very hard under the Tories and whilst shiney new railway stations were built for privatization, schools country wide rooted where they stood. This will now begin to change.

Schools will still have to submit bids to get their most pressing work done, but at least it is a step forwards.

Mr Brown found these new resources without breaking his main pre-election pledges - no rise in main income tax rates or to breach the Tory spending totals for this year and next.

However, can the new Labour chancellor (and Scotsman) actually make more people invest in the future and reduce some consumption, or will a spending boom lead to the Bank of England raising interest rates?

By scrapping tax credit for advance corporation tax (ACT) Mr Brown hopes to force companies to spend less on dividends and put more money into investment for the future, however, many smaller companies, that pay a great deal of corporation tax instead of mainstream Income tax when directors declare dividens will be sorely hurt. They will now have to pay employees and employers NI and social security thereby saving the Treasury a very useful £5400m a year.

The cut in corporation tax by 2% will be welcome however.

The City of London was not sure what to do about the budget, but the chancellor said he'd like to see prices being realistic: "The markets need the froth blown off current prices and if this Budget achieves that so much the better".