Unborn children to benefit but the rest is small beer

The economists and statisticians faced with calculating who gains and who loses from the Budget were able only to conclude that the substantial winners have not yet been born.

While the introduction of the £250 to £500 child trust may well prove one of the more redistributive acts of his chancellorship, Gordon Brown's other tinkering looks like making only marginal difference.

Pensioners and working families with low incomes are the only groups in the money, although some drinkers and motorists make real-term gains because Mr Brown chose to freeze duties on spirits, cider and petrol instead of putting it up in line with inflation. Some company car owners may lose out from 2005, when there is a reduction in the level of carbon-dioxide emissions allowed before the vehicle attracts higher rates of company car tax.

Otherwise, it all seems pretty small beer. The Institute for Fiscal Studies (IFS) calculates that the package of new measures amounted to a net giveaway of £500m as compared with the previous position. It is a figure dwarfed by the almost £5bn gained by the Exchequer as a result of changes previously announced but coming into force this year.

The over-80s gain an extra £100 a household per year through the increase in the winter fuel payment and there was also an increase in the generosity of housing benefit for families on the working tax credit and working part time. But these measures will boost the weekly disposable income of a single pensioner by less than a third of 1 per cent and a single-parent family by just a tenth of 1 per cent. They pale in comparison with the increased disposable income these groups enjoy as a result of changes already coming into effect.

That said, Mr Brown continues to prove himself a redistributive chancellor. The cumulative effect of measures announced in Mr Brown's recent Budgets will be to shift money from the wealthiest 40 per cent of families this year.

Carl Emmerson of the IFS said: "Both the increase in the winter warmer for the over-80s and the changes to working tax credit and housing benefit have a progressive effect on the income distribution, in that poorer households gain, but again the effects are small."

The poorest 10 per cent will find themselves 5 per cent better off as a result of changes coming into force this tax year or coming into force later. These improvements compare to a 0.8 per cent fall in the weekly disposable income of the richest 10 per cent of the population.

The IFS says it is unable to model the effects of the child trust fund because it will only have an impact "in the much longer term".