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Sunday, March 7, 1999 Published at 11:17 GMT

Budget leaks slammed

Ken Clarke during his time as chancellor: Leaks are "deplorable"

Former Chancellor Ken Clarke has condemned Budget leaks as Sunday's newspapers unleash another wave of speculation.

Eve Conway reports: Clarke is complaining of 'serial leaking'
Mr Clarke said advance notice of measures in Tuesday's Budget could have a significant effect on the markets through the actions of City analysts.

He blamed Charlie Whelan, the chancellor's former spin doctor who quit amid the fall-out from the Peter Mandelson loan scandal, for the on-going leaks.

"Obviously somebody is doing this for Mr Brown now," Mr Clarke said.

[ image: The end of mortgage interest relief is one hot prediction]
The end of mortgage interest relief is one hot prediction
"It is absolutely breaking the rules. It isn't just a tradition - it is a serious rule.

"The reason chancellors used to be sacked if they briefed people about their Budgets was because people make money or lose money by speculating in the markets."

Kenneth Clarke: "This is breaking a very serious rule"
The former Conservative chancellor told GMTV's Sunday Programme: "Ever since Gordon Brown has been chancellor, he has trailed his Budget, sometimes with misleading trails. I think it is deplorable."

What the papers say

The attack came as the latest round of press speculation predicted tax breaks to help the middle-aged unemployed and those wishing to buy shares.

Tristan Biggs reports: "Brown to be both prudent and popular"
Other key measures touted include a reprieve for married couple's tax allowance and the abolition of mortgage interest relief to fund the 10p starting rate for income tax.

The digested Sunday newspapers' Budget predictions:

  • The Observer - a tax allowance to guarantee the over-50s an 175 income if they return to work full-time
  • The Sunday Telegraph - a reduction or the scrapping of mortgage interest relief to pay for a 10p income tax band; plans to tax child benefit to the better off have been delayed
  • The Sunday Times - centrepiece measures to encourage share ownership through tax breaks
  • The Sunday Mail - cigarettes to go up 23p a packet and petrol 23p a gallon, while car tax will be cut by 50 for smaller models
  • The Sunday Express - tax on child benefit for some; 10p income tax rate delayed.

A Downing Street spokesman said: "We don't comment on the Budget in advance. This is the usual pre-Budget speculation."

A Treasury spokesman put the press reports down to frenzied guesswork.

"We will not be drawn into commenting on the Budget," he said.

Accountants envisage 10p band

[ image: The lowest paid could benefit by 100 a year through a 10p tax rate]
The lowest paid could benefit by 100 a year through a 10p tax rate
But the focus of advance reports continues to be the possibility of a 10p starting rate of income tax.

Accountants KPMG said the new rate would apply only to about 1,000 of a person's earnings.

The 10p starting band is a Labour manifesto commitment, but some economic commentators say it will be costly and do little to tackle poverty.

KPMG estimates the new band confined to the level of income it predicts would save the lowest-paid workers about 100 a year.

It would have little effect on other earners as the 20p rate would be scrapped at the same time, it says.

The firm also thinks interest rates have fallen sufficiently for an end to mortgage interest relief.

Miras is currently available at a 10% rate for the first 30,000 of a mortgage.

Its abolition would cost the average home-owner more than 200 a year.

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