Chancellor Gordon Brown has sought to establish his "green" credentials by ending the three-year freeze on fuel duties and imposing a £1 billion levy on air travellers.
Delivering his 10th - and almost certainly his last - Pre-Budget Report (PBR), Mr Brown declared that the public finances were in good shape while the economy was powering ahead.
However the Tories accused him of quietly preparing the ground for a public spending spree ahead of the next general election, by which time he is expected to be Prime Minister.
Despite predictions of a major education package, the PBR contained only relatively modest measures - a cumulative £2.2 billion capital injection for universities, colleges and early learning centres over the next four years on top of the £34 billion he announced for schools in the Budget in March.
There will also be modest increases in amounts paid directly to headteachers, which will typically rise to £200,000 for secondary heads compared to the £190,000 announced at the time of the Budget. A scheme offering free books for children aged one to three will also be extended to provide a total of three million free books to children as they start primary school at five and secondary school at 11.
However the main focus of the Chancellor's Commons statement was environmental measures.
From midnight, fuel duty will rise in line with inflation by 1.25p a litre after three years on hold. And from February 1, air passenger duty will double - an increase from £5 to £10 on most flights - bringing in an additional £1 billion a year for the Exchequer. Mr Brown insisted that the money would be used to fund spending on priority areas such as public transport.
There will also be a time limited stamp duty exemption on new "zero carbon" homes as part of a 10-year drive to ensure all new homes are zero carbon rated.
On the economy, the Chancellor announced that growth this year would be 2.75% this year compared to the 2 to 2.5% he predicted at the time of the Budget. He forecast further growth of 2.75 to 3.25% next year, although he quietly revised down his Budget forecast for 2008 from 2.75-3.25% to 2.5-3%.
At the same time he raised borrowing forecasts by between £1 and £2 billion a year over the next five years. Under the revised forecasts net public borrowing will peak this year at £37 billion before falling back to £22 billion in 2011-12.
