GORDON Brown attempted to pave the way for a third Labour term yesterday with a Budget promising billions more for public services - but left a question mark over thousands of North-East civil service jobs.

Mr Brown pledged an extra £8.5bn for education by 2008. He also sought to buy off pensioner protests over rising council tax bills with a one-off payment of £100 for every household with someone over the age of 70.

But Mr Brown faced immediate trade union protests over surprise plans to make 40,500 staff redundant in benefits offices, Customs and Excise and the Inland Revenue.

The shock announcement left more than 14,500 civil servants in the North-East facing an uncertain future.

Although a Treasury spokesman said no decisions had been taken on where the axe would fall, unions said they feared the worst.

The Department for Work and Pensions call centre, in Longbenton, Tyneside, employs about 3,000 people, working on areas including pensions and child support.

Tony Jarvis, the Public and Commercial Services Union (PCS) northern regional officer, said: "We have not been consulted in any way.

"At the very least you would have thought the Government would say they were looking at this by way of review to make efficiency savings, but we knew nothing about it."

But the Chancellor insisted the efficiency savings would help release an extra £20bn by 2008 for frontline services, such as hospitals, schools and the police.

Mark Serwotka, PCS general secretary, said: "For thousands of hard working staff to hear that they are losing their jobs totally out of the blue without consultation is unacceptable."

Mr Brown said all departments would have to cut their administrative costs by at least five per cent by 2008, with further job cuts to be announced later.

Delivering an upbeat message in a 55-minute speech, the Chancellor said the robust UK economy meant he was on target to meet his spending rules, despite a large Budget deficit.

To Labour cheers, Mr Brown said: "I can now report that Britain is enjoying its longest period of sustained economic growth for more than 200 years - the longest period of sustained growth since the beginning of the industrial revolution."

Overall growth had been twice that of the Eurozone, said the Chancellor.

But Conservative leader Michael Howard said: "This is a credit card Budget from the credit card Chancellor - a borrow now tax later Budget from a borrow now tax later Chancellor."

The Chancellor would force taxpayers to pay for his economic management in a third term of Labour tax rises.

There was a "black hole" in Mr Brown's spending plans, with public borrowing forecast to reach £37.5bn this year.

Mr Howard said: "And this is at a time when you claim the economy is doing well. How much would you be borrowing if the economy went into a downturn?"

Mr Brown increased duty on pint of beer by a penny, by four pence on a bottle of wine, but froze it on spirits, cider and sparkling wine.

Duty on cigarettes goes up by eight pence on a packet of 20.

Corporation and capital gains tax were frozen, as was stamp duty. The Chancellor also froze inheritance tax, and increased the threshold to £263,000.

An investigation was promised into the way the tax system treats Internet betting exchanges, which have been at the centre of race-fixing allegations.

Mr Brown also announced the extension of a scheme to teach new skills to workers across the whole of the North-East, by paying their firms compensation for the time off.

Under the Employer Training Pilots, companies receive up to £6.50 an hour in compensation, so they do not suffer for allowing their staff out of the workplace