Hints of concessions to drivers

But Mr Brown insisted that there would be no return to the past practice of governments splashing out at times of boom, thus prompting a bust to follow.

"I will never allow hard won and newly won economic prosperity to be put at risk," he said.

He said that tax cuts in the late 1980s were unaffordable and led to the recession that followed in the early 1990s.

"With our prudence matched by higher productivity, Britain can grasp the great interest rate prize that has eluded us for a generation: a longterm future of low and stable interest and mortgage rates upon which people can rely and business can plan ahead.

"But this would be put at risk if unaffordable demands such as for cuts in fuel duties of up to 26p were met on Wednesday (pre-Budget report day) with interest rates rising soon after.

Speech was prelude to pre-Budget report

"So while I do recognise, and the Budget will respond to, the genuine concerns of hauliers and motorists, I will do nothing that would risk returning the economy to 1980s boom and bust."

Mr Brown said a priority now was for UK productivity - output per worker - to increase faster than its competitor countries.

To do this, areas such as education and transport needed to be improved, as well as providing the stable interest rates which encouraged firms to invest for the future.

On the euro, he said his position remained the same - support in principle for the UK joining, but only if and when the five economic tests were met.

Mr Brown also said that his pre-Budget report would include details of some new stock option incentives, and some form of VAT simplification.