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Wednesday, 10 July, 2002, 03:01 GMT 04:01 UK
No ordinary spending review


It's been a long, sticky few weeks of negotiation. Tony Blair has cancelled a huge number of meetings to focus on it. Gordon Brown has thought of little else.

But at last the government has completed the key points of its latest spending review which will be unveiled on Monday 15 July.


The review is a clutch of crucial decisions about what the Labour government is for, a year after its re-election

The crucial point is that this is not simply a spending review, the customary allocation of small percentage increases or cuts, department by department.

It is a clutch of crucial decisions about what the Labour government is for, a year after its re-election.

The spending review is meant to set the course for the next three years, in effect up to the next election.

Laws scrapped

The Chancellor's main theme will be productivity - not enough new companies, not enough new jobs, not enough enterprise.


Mr Brown wants to see a bonfire of the old post-1945 planning laws

It is a familiar lament to anyone who knows British politics over the course of the second half of the twentieth century.

This time, though, Mr Brown believes the surroundings are different: low inflation is here to stay; globalisation is now understood; the old background of currency or balance of payments crisis is gone for good.

What is needed, the Treasury believes, is greater flexibility - letting the prosperous parts of the country grow faster, making sure the skilled workforce is available, and getting rid of old laws that inhibit economic growth - in essence, a bit more America and a bit less Europe.

So, over the next three years, Mr Brown wants to see a bonfire of the old post-1945 planning laws, allowing business to build and expand in areas where it was once barred.

More houses

Laws designed to keep smokestack industry away from where people live are irrelevant to the age of low-rise high-tech business, he will argue.


The south-east of England needs more houses, many of them low-cost, and fast

The south-east of England needs more houses, many of them low-cost, and fast.

Far more children, particularly from poorer homes, need to be persuaded to stay on at school, then go to university, to acquire the skills the economy is so short of.

These broad themes will come alongside a deluge of new spending plans, focusing on street crime, asylum, the rural economy and much more.

It is clear that the Treasury now has its fingers deep into virtually every spending department; Mr Brown's spending increases have come at the price of new agreements and targets signed up to by his colleagues.

He privately brushes aside recent US business scandals and believes the Treasury's numbers are robust and even cautious, though some colleagues have been told there is no room for extra spending or extra taxation - things are already quite tight.

Outcry coming

Mr Brown's critics will argue that after five years of Labour, extra taxation and extra regulation are responsible for a serious fall in productivity.


The desire for faster economic growth will produce huge local opposition

Tory shadow ministers say that the very passion for micro-management that will be so visible next week when the spending review is unveiled has had a seriously damaging effect on the economy.

More immediately the desire for faster economic growth will produce huge local opposition - in counties where housebuilders suddenly get the go-ahead to expand, or towns near airports which will be encouraged to push ahead with more runways.

There will even be outcry in the cities and suburbs where business parks are able to open more quickly than in the old days.

Behind the reassuring words next week, there is a good, old-fashioned political gamble taking shape.

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

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