Brown stokes pre-election tax battle

Gordon Brown stressed the need for a "balanced approach"

Chancellor Gordon Brown has re-affirmed his plan to deliver "targeted" tax cuts ahead of an expected May election.

Mr Brown told the BBC's Ten O'Clock News that tax cuts would be made "where possible" on "national priorities."

The cuts are expected to be geared towards helping pensioners and boosting payments to families with young children.

Prime Minister Tony Blair said on Sunday that the Labour Party's election campaign would concentrate on the state of the economy.

"Vast increase"

Mr Brown said: "In the budget and in our economic manifesto, it is going to be absolutely important that we have a balanced appproach, in the national interest, to keep interest rates stable, to invest in health, public services and education, vital for economic growth and for social justice.

"And of course, where possible, targeted tax cuts on national priorities."

Shadow chancellor Michael Portillo accused Mr Brown of being imprudent with the economy and increasing public spending "vastly".

No 'service improvement'

Liberal Democrat Treasury spokesman Matthew Taylor said Labour had done little to improve services in the first two years of this parliament.

And although the party was increasing spending with an election approaching, it had still spent less than the previous Conservative government, Mr Taylor added.

Last week Mr Brown ruled out across-the-board tax cuts for voters.

In an interview with The Times newspaper, he attempted to dampen speculation that he was planning to cut the basic rate of interest tax.