Alistair Darling drew up the battlelines for the general election on Wednesday with a highly political Budget that squeezed the better off while offering help to new homebuyers, the elderly and the young unemployed.

In his final parliamentary setpiece before the country goes to the polls, the Chancellor said he was determined to ensure that those who had done well in the good years "should now pay their fair share of tax".

However the Tories warned that tens of millions of ordinary workers would be hit by an effective tax increase with a freeze on personal allowances, despite a 3.7% retail price inflation rate.

At the centrepiece of Mr Darling's statement was a two-year stamp duty holiday for first-time home-buyers on properties up to £250,000, paid for by a new 5% rate on homes over £1 million.

He said that lower-than-expected unemployment figures meant that he could extend the guarantee of a job or training place for all 18 to 24-year-olds for an additional 12 months to March 2012.

And he announced that the inheritance tax threshold would be frozen at £350,000 for another four years - in contrast to Tory plans to scrap the levy on estates over £1 million - in order to help pay for care for the elderly. At the same time the Chancellor sought to reassure the markets of his commitment to tackling Britain's record deficit, with a further £9 billion in savings on top of the £11 billion of efficiency measures in December's Pre-Budget Report.