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| Wednesday, 17 April, 2002, 14:12 GMT 15:12 UK Brown prepares for crucial Budget ![]() Gordon Brown: Plans backed by ministerial colleagues Chancellor Gordon Brown is expected to increase taxes to pay for better public services when he unveils his Budget later on Wednesday. Mr Brown has left Number 11 Downing Street to make his way to the House of Commons to deliver what many regard as the most important budget of his political career. Earlier, his plans gained the backing of ministerial colleagues who drummed the Cabinet table in support during a 30 minute preview in Downing Street.
But the widely expected package of tax increases to fund more spending on public services has led to the Conservatives warning of a return to old Labour "tax and spend". They claim the government's extra millions for the NHS will be wasted without wholesale reform - a message echoed by the Confederation of British Industry. Health spending Mr Brown's Budget speech, which starts shortly after 1530 BST, comes as a government-commissioned report says spending on healthcare must more than double to �184bn a year over the next two decades. The prime minister's spokesman said that in addition to outlining the main themes, Mr Brown underlined to the Cabinet that economic stability could not be risked "whatever difficult decisions that would entail". The prime minister and chancellor had been "working very, very closely on the Budget", the spokesman said. Shadow chancellor Michael Howard told BBC Radio 4's Today programme that Labour had already raised taxes by an average of �1,600 per person.
Reports have suggested tax increases could total between �5bn and �10bn, which could largely come from National Insurance. The Liberal Democrats say public services do need more money. But the party argues the government should have fought the election on a tax raising platform. Petrol 'freeze' Many of Mr Brown's plans have been leaked to the media in the run up to the Budget, as ministers attempt to cushion the blow of potential tax increases for middle income voters.
Mr Brown may decide to phase the tax increases in over several years, avoiding a sudden increase in April. With world oil prices rising, he is also expected to freeze petrol duty for a second year running. Consumer spending Smokers and drinkers might suffer, with up to 20p expected to go on a packet of 20 cigarettes. Some economists have said Mr Brown may choose instead to put 1% on VAT rates, but this would not be a popular move with business, or with traditional Labour supporters. Experts have also warned that a large tax rise - of �7bn or more - could put the brakes on the consumer spending boom that has been driving the UK economy. Mr Brown is expected to make up to �2bn available to boost the take-home pay of low-paid workers. A new child tax credit would boost the incomes of people who stay at home to look after children. This year's Budget is particularly important as the government will, in July, fix its spending plans for the next three years. Health report The NHS review was written by former NatWest chief executive Derek Wanless. The Wanless Report says Britain must spend 7.1% more in real terms each year on health over the next five years, with more rises up to 2022. In general, the report backs the government view that extra healthcare investment should be funded by general taxation but must go alongside reform. Mr Howard branded the timing of its publication a "disgrace". Mr Brown's "idea of a debate is to start it in the morning and shut it down in the afternoon", said Mr Howard. |
![]() Budget - as it happens
Brown's big gamble
See also: 17 Apr 02 | Health 17 Apr 02 | Education Internet links: The BBC is not responsible for the content of external internet sites | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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