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Tuesday, 12 February, 2002, 16:31 GMT
Brown rejects EU's 'advice'
Gordon Brown
Brown: "European Commission is imprudent"
Chancellor Gordon Brown is refusing to cave in to European Union pressure to drop plans for a big increase in public spending.


We believe the policy we are pursuing is right

Gordon Brown

The European Commission wants Britain to concentrate on cutting debt rather than increasing investment in schools, hospitals and transport.

It says Mr Brown's plans to step up public spending risk flouting a "growth and stability pact" which is meant to help EU countries stay on the same economic track.

Speaking after a meeting of EU finance ministers Mr Brown accused Brussels of being "imprudent" in its assessment of his budget plans.

'Taking exception'

Mr Brown said: "We are engaged in a very major task to turn around historic levels of under-investment in our country and we are not going to cut public spending and investment.

"That is why I took exception to the Commission's views on the United Kingdom."

He said the government had already achieved a major reduction in debt.

And that had to be taken into account when assessing public spending.

Spending too much

Mr Brown went on: "The Commission may have sought for us to take action (to cut the budget deficit) in future years, but we believe the policy we are pursuing is right, is within the terms of the growth and stability pact, and a prudent interpretation of the pact will include recognition of the importance of public investment."

Mr Brown's comments came as Eurozone finance ministers voted to spare Germany and Portugal censure for spending too much money.

EU countries in the eurozone which breach the terms of the pact - including a maximum ceiling on budget deficits of 3% of national wealth - can face hefty fines.

With Britain outside the single currency, the Commission can only advise Mr Brown.

The chancellor pointed out that a Commission declaration that the UK's budget deficit projections might not be "in line with requirements" had been dropped by fellow EU finance ministers in their conclusions.

Returning the favour, Mr Brown backed Germany over a Commission attempt to issue an "early warning" about an unsustainable budget deficit.

See also:

12 Feb 02 | Business
Germany escapes EU wrath
17 Dec 01 | UK Politics
Brown takes 'Marshall Plan' to US
04 Feb 02 | UK Politics
Wreckers speech 'could signal tax rises'
30 Jan 02 | Business
Will taxes have to rise?
19 Nov 01 | UK Politics
US cool towards UK aid proposal
28 Jan 02 | UK Politics
Budget date set for April
28 Jan 02 | UK Politics
Gordon Brown returns to work
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