BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific
BBCi NEWS   SPORT   WEATHER   WORLD SERVICE   A-Z INDEX     

BBC News World Edition
 You are in: Business  
News Front Page
Africa
Americas
Asia-Pacific
Europe
Middle East
South Asia
UK
Business
E-Commerce
Economy
Market Data
Entertainment
Science/Nature
Technology
Health
-------------
Talking Point
-------------
Country Profiles
In Depth
-------------
Programmes
-------------
BBC Sport
BBC Weather
SERVICES
-------------
EDITIONS
Monday, 15 July, 2002, 16:11 GMT 17:11 UK
Q&A: Who gains from the Spending Review?
UK Chancellor Gordon Brown has just given his third Spending Review, laying out the government's plans for public spending over the next three years.

Amid the usual flurry of numbers, real and imaginary, and political promises on everything from sports funding to childcare, what is the average voter supposed to think?

Hang on: Didn't we just have the budget?

We did - in April.

This event has many of the trappings of the annual budget statement to the house; it uses much the same language, and many of the same promises.

But its intention is slightly different.

An innovation brought in by New Labour, the Spending Review aims to cast the government's plans three years forward.

This, Gordon Brown feels, gives it a considered, strategic feel often missing from the short-term, knee-jerk decisions contained in an annual budget.

It also, his critics say, gives him yet another chance to crack the whip on spending departments, and grandstand in the House of Commons.

So what does it mean for me and my wallet?

It doesn't quite work that way.

The Spending Review is more focused on long-term policy than the nitty gritty of capital gains tax and the price of a pack of ciggies.

As a result, it's harder to say right now whether the average punter is any better or worse off.

Most of the spending plans relate to a target in distant 2005-06, and some do not envisage any change until the year after next.

The only changes that will make much difference to anyone's pockets are to do with benefits, especially the well-trailed 1,500 a year to encourage GSCE students to stay on at school.

But don't expect the money to materialise overnight.

Education was supposed to have been the big thing this time, wasn't it?

Indeed, just as NHS spending took centre stage in April's budget.

It is now modish to give each expenditure event a theme, giving the journalists something to get hold of in what could otherwise be an off-putting jumble of figures.

And Mr Brown has not disappointed: he has pledged a 6% annual increase in the education budget over the next three years, somewhat higher than expected.

Part of that money will go to rebuilding school facilities, but most will be given to schools to spend on quality improvements - ideally targeted at the most deserving schools, who in turn have to submit to rigorous inspection.

In all, investment in education is to quadruple in real terms by 2005-06.

There seems to be more money for everyone. Can we afford it?

Ah, yes, how will Mr Brown pay for all that.

There certainly is more money all round - an extra 61bn, or about one-fifth - in department budgets by 2005-06.

The chancellor feels we can afford a little largesse, and in this statement at least is not bound to discuss how taxes may be tweaked to pay for it all.

In his April budget, he conceded that national insurance would have to rise to pay for improvements to the NHS, and critics complain that a few minor taxes have crept higher here and there.

Certainly, Mr Brown has espoused the idea that heavy spending on public services is more important than cutting taxes, especially as the UK is seen as lagging its neighbours in terms of historic investment.

At the same time, however, he is taking an optimistic view of the British economy - not one shared by everyone, least of all the City.

Recent alarrming jolts in the stock market may have more to do with the US than anything else, but there is a general sense of economic nerves that fits oddly with Mr Brown's bullish view.

Few Britons would be keen to commit to a 20% rise in their own spending three years hence, for example.

But Mr Brown says that being parsimonious with spending in previous years, and paying back a lot of debt has freed up billions of pounds, which can now be spent.

Forget the money - how about the politics? What does this do for Gordon Brown's career?

There's no great gamble here.

Overall, this statement displays no major change of tack on Mr Brown's part, and - characteristically - no huge surprises.

Brown-watchers will have combed the document, however, for hints on his relationships with fellow ministers.

Some - notably Margaret Beckett at agriculture and possibly Patricia Hewitt at trade - may have ended up with less cash than they wanted.

Others, notably the lucky Estelle Morris, education secretary, will be staggering home under a mountain of cash.

In a sense, this statement completes Mr Brown's transition from steely-eyed friend of the City to twinkling godfather of the public services - a move that will do him no harm in the eyes of the voters.

As ever, though, the proof of the pudding will be in the eating.

The government's plans for future spending are published on 15 July

Key stories

At the sharp end

Analysis

TALKING POINT

AUDIO VIDEO
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories

© BBC ^^ Back to top

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East |
South Asia | UK | Business | Entertainment | Science/Nature |
Technology | Health | Talking Point | Country Profiles | In Depth |
Programmes