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The BBC's Mark Mardell
"His line to business leaders was that the country has a great prize within its grasp"
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Monday, 6 November, 2000, 14:49 GMT
Brown: I won't squander prosperity
CBI logo
by BBC News Online's Alex Hunt at the CBI conference

Chancellor Gordon Brown has told business leaders that events such as the rising oil price would not blow the government off its long term pursuit of economic stability.

Mr Brown said his pre-Budget report would tackle some of the public concerns surrounding the high fuel prices, but he said he would not meet the "unaffordable demands" for 26p per litre cuts in fuel duty.

However, he hinted that some concessions to drivers are likely.

Fuel protest
Hints of concessions to drivers

But Mr Brown insisted that there would be no return to the past practice of governments splashing out at times of boom, thus prompting a bust to follow.

"I will never allow hard won and newly won economic prosperity to be put at risk," he said.

He said that tax cuts in the late 1980s were unaffordable and led to the recession that followed in the early 1990s.

"With our prudence matched by higher productivity, Britain can grasp the great interest rate prize that has eluded us for a generation: a longterm future of low and stable interest and mortgage rates upon which people can rely and business can plan ahead.

"But this would be put at risk if unaffordable demands such as for cuts in fuel duties of up to 26p were met on Wednesday (pre-Budget report day) with interest rates rising soon after.

Brown
Speech was prelude to pre-Budget report

"So while I do recognise, and the Budget will respond to, the genuine concerns of hauliers and motorists, I will do nothing that would risk returning the economy to 1980s boom and bust."

Mr Brown said a priority now was for UK productivity - output per worker - to increase faster than its competitor countries.

To do this, areas such as education and transport needed to be improved, as well as providing the stable interest rates which encouraged firms to invest for the future.

On the euro, he said his position remained the same - support in principle for the UK joining, but only if and when the five economic tests were met.

Mr Brown also said that his pre-Budget report would include details of some new stock option incentives, and some form of VAT simplification.

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See also:

06 Nov 00 | UK Politics
Brown's testing week
24 Oct 00 | Business
Business taxes set for reform
23 Oct 00 | Business
CBI urges Brown to cut fuel tax
04 Oct 00 | Business
Brown's pension dilemma
30 Oct 00 | UK Politics
Portillo hints at 8bn tax cuts
06 Nov 00 | UK Politics
Fuel protesters meet ministers
09 Oct 00 | UK Politics
Brown 'listening' ahead of budget
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