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The BBC's Peter Morgan
"Gordon Brown's first love has been prudence"
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bannerFriday, 14 July, 2000, 13:34 GMT 14:34 UK
Brown to open up coffers

The chancellor of the exchequer is expected to unveil big increases in funding for public services when he delivers his second Comprehensive Spending Review on Tuesday.

Gordon Brown's statement on the government's main spending plans for the next three years comes against the background of a strong economy, a low benefits bill and windfalls from the sale of mobile telephone frequencies.

All of these will help him increase spending without breaking his self-imposed limits. The main beneficiaries are expected to be health, education and transport.

This will relieve many of Labour's core supporters, who appear to have become disenchanted at the lack of progress in the government's first three years, and will improve morale as the general election approaches.

Investment emphasised

The Comprehensive Spending Review is an innovation of the chancellor, who delivered the first in 1998.

The CSR covers a three-year period and the aim is to move away from an annual departmental fight for funds in favour of a longer-term approach.

Recently, both Mr Brown and Prime Minister Tony Blair have been emphasising the need to invest in the UK's public services after what they say was years of Tory neglect.

Statements detailing what the transport and education ministries intend to do with their new money are expected later in the week.

Health spending is likely to be announced the week after, when the government's NHS modernisation plans are unveiled.

Strong economy

The UK economy is growing at a healthy 3% per year and unemployment is low. This has led to lower spending on social security, swelling the government's coffers.

In addition, the Treasury received �22bn in the spring from the sale of mobile telephone frequencies.

A smaller sale of frequencies allowing the Internet to be accessed via radio waves is expected to generate further hundreds of millions of pounds this autumn.

Mr Brown is using these windfalls to pay off portions of the national debt and to take advantage of the resulting smaller interest repayments by raising annual spending.

Election not far off

Labour MPs will certainly be looking to Mr Brown to give them a boost prior to the summer recess.

For much of the year, and particularly in recent weeks, the government appears to have been on the back foot.

Mr Hague has been rampant in the Commons and the opinion polls have suggested a fall in Labour support across the country compared to the unprecedentedly high levels of the government's early years.

That has concerned some Labour strategists, well aware that the most likely date for the general election remains next May.

However, Mr Blair appears to have regained some of the initiative in the past few days - despite well-documented family problems - tackling the issue of spin versus substance and improving his personal performances.

He will certainly be looking to his chancellor to continue the process on Tuesday.

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See also:

13 Jul 00 | Business
Big spender 'still prudent'
29 May 00 | UK Politics
Brown 'plans �40bn boost'
13 Jul 00 | UK Politics
Blair promises spending rise
12 Jul 00 | UK Politics
Blair moves back to substance
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