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NEWS Wednesday, 10 March, 1999, 13:46 GMT
Digesting the Budget
Chancellor Gordon Brown has defended his Budget from accusations it included gimmicks to win favourable headlines.

The 1p cut in the basic rate of income tax - combined with a 10p starting rate and radical changes to family taxes - won plaudits on the front pages of most newspapers the day after the Budget.

Speaking ahead of a Budget Breakfast with business leaders, Mr Brown insisted all the changes he had made would make a real difference to workers and families.

"The 10p rate is very important because it's a signal about the importance we attach about getting people into work and it's of most importance to the low paid.

The famous briefcase: Mr Brown's box of tricks
'Flash Gordon': Mr Brown and his box of tricks
"This is not about gimmicks this is about tax reform that encourages work and families," he said.

"On the families side it is replacing what was an anomalous married couples' allowance and replace it with a child tax credit."

The chancellor said business would equally benefit from his Budget, through more open enterprise.

Mr Brown is expected to address a business brainstorming session organised by accountants Deloitte Touche. Among those listening will be the Trade and Industry Secretary Stephen Byers and the head of the Confederation of British Industry, Adair Turner.

The trade secretary will later spell out to the House of Commons the detail of the competition policy set out by the chancellor to reduce prices for goods and services.

Tax redistribution

The Conservatives are continuing to accuse the government of pursuing a policy of taxation by stealth.

Shadow Chancellor Francis Maude said: "People are just beginning to remember before the election Tony Blair said we will not put up taxes at all.

"Last week he was forced to admit taxes will go up over the course of this parliament and this Budget was the same."

He said the changes would force the middle classes to pay much higher taxes.

Married couples' allowance and mortgage interest tax relief are being abolished to help pay for more aid for low income families.

Families with children were among the main beneficiaries. Child benefit is also set to go up..

Press praise 'winner'

The UK press gave a enthusiastic response to Mr Brown's third Budget.

The Sun declared that everyone was a winner - including Tony Blair's government.

Its leader column said: "This is the American-style Budget that guarantees Labour win the next election."

Its rival, The Mirror, reacted by making "apologies for the brown-nosing ... but this is brilliant.

But Liberal Democrat Treasury spokesman warned the press it had been swept along with the hype.

"They'd be very wise to do their own sums," he said. "What they see now are the headlines. What they don't see is the real tax base has gone up."

'Death sentence for family'

Most critical among the newspapers was the Daily Mail, which said the scrapping of the married couple's allowance was in effect pronouncing "the government's death sentence on the traditional family, and on a vital part of the bedrock of our society".

But it was in a minority. The Guardian said: "Make no mistake, this is both the most pro-business Labour budget while still being impressively redistributive."

The Financial Times described the Budget as "Gordon Brown's box of sparklers".

It added: "Like the showman at a firework party, Gordon Brown yesterday released showers of lights to please nearly all parts of the electorate."

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Gordon Brown talks to Radio 4's Today Programme
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Rory Cellan-Jones reports: "Prudence is still his friend"
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