Chancellor Gordon Brown handed a huge pre-election sweetener to pensioners in yesterday's budget.

With the Government under increasing pressure from a growing army of pensioners wanting more cash and smaller bills, Mr Brown stepped in by pledging free bus passes and a £200 rebate on council tax.

Sharon Bedford, tax director at Oxford accountants James & Cowper, said: "Pensioners could have a substantial influence over the outcome of this election and it was clear the Chancellor would not forget them."

Gerry Jackson, corporate tax specialist at Oxford finance firm Critchleys, said: "Mr Brown knows the moves for pensioners are not going to cost that much, but older people are more likely to vote than the young."

Yesterday's decision ends months of speculation over what will happen to Oxford's concessionary fare scheme.

OAPs currently pay 30p for a single and 40p for return journeys in a scheme costing the city council about £1.5m a year to run.

The issue of concessionary fares was one of this year's Town Hall battlegrounds with the ruling Labour administration and Greens saying a free service would be too expensive while the Liberal Democrats and Independent Working Class Association pushed for pensioners to travel for nothing.

Jean Davies, chairman of Oxford Pensioners' Action Group (OXPAG), which represents more than 300 members across Oxfordshire, welcomed the Chancellor's pledge to give pensioners a £200 council tax refund and free bus travel.

SHE said: "Pensioners have been campaigning for free bus travel for years and if Labour is re-elected we will finally have it.

"The Government will have to stick to its promises and, if it does, it will make a major financial difference for many pensioners.

"At last the leaders of all the parties are waking up to the fact pensioners are an enormous proportion of the electorate and the number is growing because people are living longer."

Up to 20,000 Oxford OAPs use the concessionary fare scheme, but many more will do so if it is completely free.

If the financial burden was the sole responsibility of the city council, a free bus travel scheme could cost up to £2.2m.

The Chancellor also moved to quell the fears of many first-time buyers after finally bowing to pressure and doubling the ceiling on stamp duty to £120,000.

That means many more looking to get on the property ladder will not have to pay the duty, although with Oxfordshire house prices among the highest in the country, few will escape it here.

But the rise in the threshold for Inheritance Tax payments from £260,000 to £275,000 this year and £300,000 by 2007 will help many in the county concerned that the value of their property will force them to pay the levy.

Again, like stamp duty, Mr Brown has been under pressure to make changes in the tax but has waited until the pre-election Budget to make his move.

He deliberately set a neutral course on beer and cigarettes with modest rises and, known for his liking of a whisky, again froze duty on spirits.

Mr Brown also bowed to soaring oil prices and postponed any decision on raising fuel duties until September. Tax for all but larger cars was also frozen.

And he announced major education spending with a £9.4bn investment programme for schools, 15 hours of free nursery education for all youngsters by 2007, and a commitment to keep pupils in education or vocational training until the age of 18.

Businesses were also promised a long-awaited cut in red tape with the number of regulatory inspection groups slashed and tax returns simplified.