Boost for health, education and transport

The National Health Service has been promised an extra ¿500m

The Chancellor said that one of his main aims was to produce a Budget based on "prudence for a purpose". He said this was the philosophy that guided his Government's approach to public spending.

Labour pledged a two-year ceiling on departmental spending when they came to power and a "willingness to root out waste".

Mr Brown said Labour had "already achieved more than some expected" and was able to carry over extra money into next year.

As a result, the Chancellor said he was able to promise an extra £500m for the National Health Service to add to the £1.2bn which was announced in last July's Budget.

"This takes the total additional investment we have provided for the NHS in our first ten months to £2bn. The NHS is safe in this Government's hands," he said.

An extra £250m will also be put into education in 1998-9, making a total of £2.5bn since the Government took office.

" We are determined to improve education all round," said the Chancellor.

Mr Brown also announced a £500m increase in public spending on transport and £50m a year on rural transport.

"It is because of our prudence that we are able to meet our manifesto commitments, reduce the deficit and invest more in transport, education and health," he said.

Museum charges staved off

A £9m boost that will stave off admission charges at some of Britain's greatest national and regional museums was also unveiled.

Free admission to be maintained at top museums

A new £2m Challenge Fund has been set up to maintain free admission at the National Gallery, National Portrait Gallery, Tate, British Museum and the Wallace Collection, and there will be extra money for regional museums.

It will be backed by an improved Acceptance In Lieu scheme, under which heirlooms can be given to the government instead of Inheritance Tax.

The Heritage Lottery Fund is also to add £2m to the new £5m Museums and Galleries Access Fund.

Culture Secretary Chris Smith said the new funding would "improve access to the best of our cultural heritage, and therefore educational opportunities for all."