UK's Brown to talk up economy

The British economy is getting stronger, Finance Minister Gordon Brown will boast on Wednesday as he sets out his stall for succeeding Prime Minister Tony Blair in the next few months.

In what looks to be his last pre-budget report, Brown will outline the priorities for his premiership—boosting education, tackling global warming, reducing inequality and meeting the economic challenge of countries like India and China.

The longest-serving Chancellor of the Exchequer in more than a century, Brown is favourite to replace Blair who has said he will stand down within the year following growing unpopularity over the Iraq war.

Aides say the pre-budget report will draw a clear distinction between Brown and the opposition Conservatives who have got ahead in the polls under youthful leader David Cameron.

Building on a series of reviews, Brown looks set to double air passenger duty, raise fuel tax, announce plans to streamline the planning process and pledge a massive cash boost for education and skills training.

“The challenges of the next 10 years, economically, are very big and I want to show how we are addressing these challenges,” Brown told BBC radio early on Wednesday.

“We want to have the best schools in the world ... If we are going to succeed as a country we’ve got to invest in our children and our young people,” he went on to tell GMTV.

Trumpeting a record run of economic growth under his watch, the 55-year old Scot will likely raise his forecast for this year to around 2,7%. Even stronger growth of 3% is pencilled in for 2007 and 2008.

Borrowing, meanwhile, looks broadly on track to meet the budget forecasts as long as spending is kept on a tight leash.
Detailed expenditure plans won’t be out until next year but Brown has assumed spending growth of only 2% from 2008. But a big rise in immigrants from Eastern Europe may also allow a raising of his estimate for the economy’s potential growth rate, giving more leeway to put cash into areas like education in the run-up to the next election, expected in 2009.

Green Brown

Following former World Bank economist Nicholas Stern’s report painting an apocalyptic picture unless urgent action is taken to tackle global warming, Brown will announce a package of environmental measures, according to government insiders.

As global oil prices have dropped from record highs, Britons are facing a rise in fuel duty in line with inflation after years of it being frozen to placate a powerful motoring lobby.

Air passenger duty also looks set to be doubled to £10 for short hops and £40 for long-haul destinations, potentially raising another billion pounds which could be channelled into poverty reduction.

“We’ve got to meet our commitments to get the level of carbon emissions down,” Brown told GMTV early on Wednesday.

Brown also looks sure to support Bank of England policymaker Kate Barker’s call to speed up planning decisions as business complains the current system stifles competitiveness and holds up projects like building Heathrow Airport’s new terminal.

And while any cuts in corporate tax rates look unlikely, Brown will also try to stress business-friendly credentials by announcing more measures to cut regulation and form-filling.

Ever eager to position himself as the champion of hard-working families, Brown is also likely to boost home ownership schemes and signal more financial help for the poor, perhaps raising fuel allowances for pensioners.

“I hope in my statement I can bring good news for Christmas for people,” he said. - Reuters

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