BRITISH Chancellor of the Exchequer, Mr Kenneth Clarke's scope for potentially vote winning budget tax cuts widened after the government's finances swung dramatically into the black.

The Treasury coffers swelled by £1.66 billion sterling in July, thanks to a combination of the usual seasonal inflow of corporation tax and £844 million of privatisation receipts.

City economists had been expecting a surplus of only a few hundred millions at the most.

The good news for the government was further boosted by a revision of June public sector borrowing requirement (PSBR) - the amount by which spending exceeded income - to £3.48 billion from £3.65 billion announced last month.