Faced with a shortfall of around £10bn in his finances, the speculation pre-Budget was what the chancellor would do to balance the books. The answer, in the event, is that Brown has decided not to balance the books at all but, to keep borrowing, to the tune of over £37 billion this year.

With the proceeds of all this borrowing, Brown is able to offer a few sweeteners now - with the prospect of more to come - and hopes to keep the really bad news to a minimum until the time comes for the country to pay back its debts.

This time, plainly, will come only after the election.

One of the main features of this year's Budget was Brown's plans to attack what he calls "tax evasion" (but what most accountants and businesses call "tax avoidance", ie legitimate tax planning).

For some time now, the Treasury and the Inland Revenue have targeted the exploitation by businesses of perfectly legal fiscal incentives and planning schemes, claiming that, by arranging their affairs to minimise their liability to tax, they are engaging in "tax evasion". Thus Labour has sought actively to blur the distinction between sound, legal practice and criminal activity.

Just a fortnight before the Budget, Brown had called in the tax heads of the Big Four accountancy firms to stress to them that their active involvement in devising avoidance schemes for clients is stretching his and the government's patience.

So what Brown has done is to require accountancy forms to "register" their tax avoidance schemes with the Inland Revenue before they are sold to clients. Given that tax avoidance is perfectly legal and legitimate, it is unlikely that the Revenue will be in a position to outlaw any welldrafted scheme, but the object of the exercise is clearly to give the Revenue and the Treasury advance warning of the devices which are being used to minimise tax liability, and therefore to enable loopholes to be closed earlier.

Small company dividends Another tax-avoidance related measure, which was not exactly a surprise but unwelcome nonetheless, was the decision to tax small company dividends at a rate of 19%.

As trailed in his pre-Budget report last December, Brown has had second thoughts about the wisdom of encouraging small businesses to incorporate. After bringing in a zero tax rate on the first £10,000 of company profits and a 10% rate for profits up to £50,000, he has now decided that the Treasury was losing too much tax revenue from those small businesses which had taken his advice, incorporated and then took advantage of company law methods of distributing their profits.

So he has effectively performed a U-turn, leaving the 67,000 small businesses that incorporated over the last year in the lurch and facing the difficult decision of whether or not to revert to their unincorporated status.

In terms of direct tax rates, no changes are made in either income or corporation tax or in NICs. Income tax allowances are raised in line with inflation.

As regards VAT, the turnover threshold at which businesses become liable to register for VAT is raised very slightly from £56,000 to £58,000.

And the turnover ceiling for firms which wish to use flatrate VAT schemes is increased by 10% to £600,000, bringing in an additional 13,000 firms. The annual capital gains exemption threshold is raised to £8,200 for 2004/05.

Business transport costs are being subjected to a delayed tax hike. There is no immediate rise in petrol duty, but a 4% rise, well above inflation, will take effect as from September 1. This will mean that the cost of petrol and diesel will rise by about 10p per gallon after VAT is taken into account.

Brown also continued his somewhat bizarre recent practice of offering tax breaks for sulphur-free cars and fuel - even though this fuel is not available in the UK. Road tax, though, is unchanged.

Construction companies If the Budget is especially good news for anybody, it is likely to be construction companies.

Churches will be able to recover all the VAT they pay on repair work between now and March 2006.

And the Government is committed now to building tens of thousands of new homes every year, with the way forward being cleared by a streamlining of the process of planning approval.

So the chancellor has set out New Labour's stall for the next election. He will offer the country the prospect of continuing short-term borrowing based on two assumptions: the first is that the economy will continue to grow sufficiently to provide the tax revenue which will enable the country to pay back its mounting debts.

And secondly, that the electorate will actually prefer its government to invest in the infrastructure of the country, in schools, transport etc, than to offer tax cuts.

Whether the opposition parties like it or not, they have been painted into the tax cuts corner and it is on this ground that the election will be fought.