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Last Updated: Tuesday, 9 November, 2004, 12:17 GMT
Brown seeks out global challenge
Gordon Brown
Chancellor Brown was putting his vision forward to business chiefs
The UK must invest more heavily in science and technology if it is to hold its own in the global economy, Chancellor Gordon Brown has said.

Speaking at the CBI's annual conference in Birmingham, Mr Brown said his mission was to build "a shared national economic purpose".

He called for a breaking down of trade barriers around the world to meet the demands of globalisation.

Fiscal targets for the UK's current economic cycle would be met, he said.

Asian growth

The UK must take action to keep pace with countries like India and China, which are producing more and more graduates, Mr Brown said.

China produces 125,000 computer science graduates a year, while the UK only produces 5,000.

"Within 20 years half the worlds' manufacturing exports could come from developing countries," Mr Brown said

"Already China is exporting more than France, Italy and Britain. Asia is exporting almost as much as the euro area."

There are 300,000 more businesses in the UK since 1997 but rates of business growth are still half of that seen in the US, he pointed out.

Tax fears

Mr Brown attempted to allay the fears of business leaders by promising to continue to look at the corporation tax regime after pleas for him to freeze rates.

We will continue to meet all our fiscal rules in this cycle and the next
Gordon Brown, Chancellor of the Exchequer

But he told the conference that next month's pre-Budget report would not be marked by a pre-election giveaway.

"Britain cannot afford ever again to resort to the old short-termism, whether pre-election short-termism or any other form of short-termism," Mr Brown said.

He added that the government would stand firm against pressures to link pensions with earnings and would rein back the growth of government spending to bring the public finances back onto a more even keel.

"To imply that the burden of meeting the risks of the next generation should all be passed to the government is simply a repetition of the problems that led us to fiscal problems in the past," said Mr Brown.

Recently there have been doubts about whether the government would meet its so-called 'golden rule' of balancing the budget, but Gordon Brown was adamant.

"We will continue to meet all our fiscal rules in this cycle and the next," he said.

Lower-than-expected tax receipts and a pick-up in government spending has meant the government has had little margin for error.

Public finances have seen no improvement on last year at the half-year stage, despite Treasury forecasts of a moderate growth in revenues.

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