The chancellor, Gordon Brown, will use this week's budget to focus on families and those working in frontline public services.

The package of measures is reported to be worth £4 billion in total.

He is expected to announce changes to the threshold of the 10 pence rate of income tax which will deliver a tax cut for all and remove those earning under £6000 a year from the tax regime altogether.

Brown will announce a 30 to 40 pence rise in the minimum wage in line with the recommendation of the Low Pay Commission.

He will also deliver a "baby bonus" and expand the maternity system.

Betting tax is also likely to be scrapped when Brown makes his budget statement to the Commons.

The chancellor's largesse will, however, draw sharp criticism from business groups including the CBI which believes the budget could put serious pressure on inflation.