Gordon Brown Defends Budget Decisions

by Amanda Banks, Tax-News.com, London

19 April 2002

Speaking on Thursday UK Chancellor, Gordon Brown, defended his latest budget, and denied Opposition allegations that Labour had become a 'tax and spend' government.

Mr Brown stated several times in the run-up to his budget speech that he was not ruling out an increase in National Insurance contributions to fund increased investment in the National Health Service, and therefore seemed somewhat perplexed when accused by the Opposition and the media of breaking pre-election promises not to increase taxes.

'I stand by everything I said at the last election,' he said in several television and newspaper interviews. 'I was asked to rule out an increase in National Insurance and I refused to do that.'

He admitted that to a certain extent, the moves made had been a 'political gamble', but added that he was confident that the British people would support his decision to increase investment in the NHS.

'I don't think I'm nervous because I think it is the right thing to do,' he explained on Thursday. 'I accept it's a hard and difficult choice I've made, but I want the best health service and so do the British public.'

Some economists have expressed concerns at the fact that the Chancellor based his budget figures on a 2.5% projection of economic growth, rather than on the 2.25% rate previously used. They argue that the higher economic expansion estimate has meant that the Treasury will be able to forecast higher tax revenues and lower benefit claims in budget projections for future years.

However, in an interview with the Reuters news service yesterday, Mr Brown said that he expected that the higher growth rate would be achievable as the result of a series of reforms put in place by the government over the past few years.

'We've set down a long term plan. This is not a budget for just a year,' he concluded.

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