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Friday, 23 November, 2001, 15:20 GMT
Brown takes centre stage
Nyta Mann

Gordon Brown has had a quiet war, remaining largely below the radar screen as Tony Blair strides the international stage and other ministers dominate the domestic agenda.

That all changes now with the pre-Budget report, presented to Parliament next Tuesday, which will see the chancellor in command of the home front.

When he is not fronting his own department's announcements Mr Brown is usually the glowering presence behind those from his cabinet colleagues.

His long reach across all areas of government, dictating even the finer details of spending, is a cause of persistent complaint from his fellow ministers.

A fresh eruption of their resentment saw the return this week of newspaper headlines on the fractious state of the Blair-Brown partnership-cum-rivalry - prompting Mr Brown to take the unusual step of calling Mr Blair "his best friend in politics" in a newspaper interview.

Back to iron chancellor

As Mr Blair engaged in his energetic shuttle diplomacy, Mr Brown had appeared in danger of having his nickname changed from the iron to the invisible chancellor.
Tony Blair has dominated the political stage

His mini-Budget will see that threat off. A Labour innovation, the statement he will make from the despatch box on Tuesday is technically supposed to be a dry occasion consisting of economic forecasts.

In practise - and inevitably - Mr Brown has found it impossible to resist using the opportunity to tinker with taxes and make headline-grabbing, often politically expedient announcements.

He has used previous pre-Budget reports to buy off fuel protesters with a cut in fuel duty, announce a rise in pensions and the granting of free TV licences for the over-75s.

Advance groundwork

The advance groundwork for this year's report has already been done: the war currently being waged in Afghanistan means that taxes will probably have to go up.

That isn't the way Mr Brown actually puts it, but it is the way government spinners instructed us his words should be interpreted.

The latest instance came in his speech to the CBI conference. But the idea that the chancellor is set to impose tax rises during this parliament has been widely suspected since even before June's general election.

The independent Institute for Fiscal Studies predicted back then that if the government was to keep to its promises on spending levels, taxes would have to go up.

But with "stealth taxes" much harder to camouflage than they were when New Labour first took office, the unexpected intervention of the current war in Afghanistan may prove a handy political shield for any incoming increases to, say, National Insurance charges.

Shortfall in tax take

The chances of further cash handouts to health and education, Labour's key areas for delivery, could well have been hit by the 4bn shortfall in forecast tax revenues from UK firms as a result of the global economic slowdown.

Mr Brown will probably want to reassure the City following the takeover of Railtrack, not least since because the Treasury is still pinning its faith on "public-private partnerships" - notably for London's Underground.

Other clues as to what his pre-Budget report may contain can be found in his speech to Labour's conference last month.

Expanding the "New Deal" to the long-term unemployed was floated, as was a new tax credit for "innovation" across manufacturing - a sector struggling with the economic slowdown and strength of the pound compared to the euro.

A funding boost for the Metropolitan Police could also be on the cards. The service is said to be 14m over budget, largely as a result of the extra policing costs following 11 September.

Economic hazards

But Mr Brown's return centre-stage is also assured by the hazards around which he must now negotiate the British economy.

Even before 11 September, things looked rocky as far as the world economy was concerned. They have become a lot worse since that day.

Recession in the US looks a near certainty. Japan is already in the grip of recession. Germany is at near zero growth.

Those are the top three economies of the world. The fourth is the UK, where growth remains healthy and analysts still predict to be the strongest of the G7 economies this year and next.

But will those other economies, with which the UK trades, start recovering before Britain's gets pulled down further with them?

Harold Macmillan characterised "Events, dear boy, events" as the making or breaking of governments. There are also those events that can leave governments standing, however, while their chancellor falls.

Chief secretary to the treasury, Andrew Smith
explains and gives support to the different elements of Gordon Brown's speech
The government's pre-Budget report will be on 27 Novewmber






See also:

06 Nov 01 | UK Politics
04 Nov 01 | Business
22 Oct 01 | Business
26 Nov 01 | Business
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