BRITAIN: The British Chancellor of the Exchequer, Mr Gordon Brown, set the stage yesterday for the next British general election with three-year spending plans he hopes will portray the Conservatives as the party of "cuts" in public services. Frank Millar, London Editor, reports.
However, the Chancellor's big day in the Commons was slightly overshadowed by fresh reports of tension between Numbers 10 and 11 Downing Street over Prime Minister Mr Tony Blair's apparently renewed determination to lead Labour into the election and serve a full third term.
And the political spotlight was fast turning to two testing days ahead for Mr Blair.
Tomorrow sees the publication of the Butler Inquiry report into British intelligence failures in the run-up to the war in Iraq, to be followed by difficult by-elections in Leicester and Birmingham on Thursday.
Mr Blair will receive his copy of Lord Butler's report later today on condition of confidentiality, while the main opposition leaders, Mr Michael Howard and Mr Charles Kennedy, will have an opportunity to read it in the Cabinet Office tomorrow morning ahead of Mr Blair's statement to MPs in response.
Meanwhile, the Conservative shadow chancellor, Mr Oliver Letwin, dismissed Mr Brown's spending plans as "a manifesto for fat government and fake savings".
Economic experts suggested moreover that the Chancellor's growth rates for spending in the final two years to 2007/8 would look less generous if next year's previously announced increases were not included. A bullish Mr Brown boasted "continuing record investment" in frontline services as he announced spending by government departments would rise by £61billion - from £279.3bn this year to £301bn next year and £324bn in 2006/07 and £340bn in 2007/8.
At the same time he announced plans to axe some 104,000 civil service jobs across the United Kingdom, and to relocate a further 20,000 jobs from London to the regions.
Mr Brown said the job cuts, combined with other efficiency measures plus low debt and high employment, would save £21.5bn a year for spending on the public services.
The Chancellor also aimed to raise £30bn from the sale of government assets.
However, independent commentators suggested the job cuts might only account for about £4bn and that the Chancellor assumed continuing economic growth at present or increased levels, while Mr Letwin insisted the result of a third Labour term would be increased taxes.
Given Mr Letwin's previous commitment to increase spending only on education and health, Mr Brown yesterday laid the election trap for the Conservatives.
He announced there would be more money for just about everything, from defence and counter- terrorism to community policing, through education, health, science, transport, housing and the environment, to international aid, further help for pensioners to heat and insulate their homes and pilot schemes in 500 areas as part of a plan to extend nursery education to two-year-olds. And the Chancellor took particular pleasure in announcing that the armed forces budget would rise from £29.7bn this year to £33.4 by 2007/08.
He claimed, to Labour cheers, that the government had presided over the longest sustained increase in defence spending in two decades.
"There is such a thing as society," he said, again declaring that his famous "prudence" had been "for a purpose".
However, the normally quietly spoken Mr Letwin ripped into the Chancellor, insisting: "What this review really means is more bureaucracy, more targets, more initiatives, more task forces, more centralisation, more regulation, more borrowing and more taxes."
Turning Mr Brown's planned economies against him, Mr Letwin accused the government of being responsible for £21.5bn of waste with "not a word of apology".
And he demanded: "Why is this Chancellor the only person in Britain who thinks the way to waste less is to spend more?"