Brown refuses to exclude tax rises

Mr Brown insists Labour can meet its spending pledges

Gordon Brown has insisted that Labour can maintain its pledges on public expenditure without raising income tax.

But the chancellor refused to rule out other tax changes in forthcoming budgets.

If the chancellor can't say things about higher taxes, then we shouldn't have these unattributable statements

Michael Howard

In an interview with BBC Radio 4's Today programme, Mr Brown said that the UK was able to cope with increased military expenditure in the wake of the events of 11 September.

He also insisted that the international economic slowdown would not hamper the government in implementing its spending commitments.

Asked whether other taxes might be adjusted, Mr Brown said he would not comment on what were essentially matters for the Budget.

He said: "What we said at the election is we made specific promises on taxation on income tax, on the basic rate, on the top rate.

"I also said we're not going to make promises on every single issue of taxation - these are matters for the Budget."

Shadow chancellor Michael Howard meanwhile suggested that the government had long been facing a spending gap even before any hint of an economic slowdown or the US terror attacks and the ensuing military action.

Increasing expenditure

"I don't think it's got very much to do with the war, it's been clear for quite some time that there would be a need to increase taxes if government spending plans were to be financed," he told Today.

"Government spending is increasing at a much faster rate than the rate at which the economy is growing.

Mr Howard attacked government spin

"And the chancellor has never said what he's going to do about this in the years beyond 2003. It was true even before the world economy started to slow down."

Mr Howard accused the government of releasing a series of statements at the weekend from "high placed sources" saying that tax increases were on the way.

"If the chancellor can't say things about higher taxes, then we shouldn't have these unattributable statements off the record from people highly placed within government.

"If we are going to have those statements then the chancellor should come clean."

Euro

Mr Brown was also quizzed on the issue of the euro in the wake of his speech on Sunday to the CBI.

Again he insisted that the five tests he set out in 1997 continued to apply to UK entry into the single currency - a decision that ultimately had to be taken by the British public in a referendum.

He also told CBI delegates that he remained cautiously optimistic about the British economy and reaffirmed that Britain would join the Euro when the "time was right".