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Brown set to focus on education UK growth 'better than expected'
(about 1 hour later)
Gordon Brown will put spending on schools at the heart of his 10th and possibly final pre-Budget report. The British economy is expanding faster than expected, Chancellor Gordon Brown has told MPs.
The chancellor said better education was vital for the UK to meet challenges from countries such as China and India. Mr Brown has revised his 2006 forecast upwards to 2.75%, from last year's Budget predictions of 2-2.5%.
Higher fuel duty for motorists and air passengers are also expected as part of a package of "green" measures. Mr Brown, who is expected to become prime minister next year, is delivering his 10th and possibly final pre-Budget report in the House of Commons.
The Tories said Mr Brown's boasts masked falling living standards, while the Lib Dems said his legacy would be government waste and personal debt. He is expected to focus on education spending and "green" taxes such as fuel and air passenger duty.
The chancellor, who is favourite to become the next prime minister, is expected to give an upbeat assessment of the economy but his pre-Budget report is being seen as more of a political manifesto for the leader-in-waiting. He told MPs the UK was performing better than its major competitors.
But he also stressed the importance of investment in education and training if Britain is to compete with countries such as China and India.
PRE-BUDGET PREDICTIONS Economic growth to meet or exceed targetFuel duty to be re-linked to inflationAir passenger duty tax increaseFuture education spending plans to be unveiledCrackdown on music and film piracyPRE-BUDGET PREDICTIONS Economic growth to meet or exceed targetFuel duty to be re-linked to inflationAir passenger duty tax increaseFuture education spending plans to be unveiledCrackdown on music and film piracy
Ahead of the speech he told Cabinet colleagues: "With the foundation of stability achieved by the government and the economy growing more strongly than expected Britain is well-placed to be one of the success stories of the 21st century. Education
"But only if we now make the necessary long-term investments in education and skills and take the right long-term decisions in response to reports published around issues such as transport, research and the environment." Trend growth will be maintained at 2.75%, while the public finances will be based on a rate of 2.5%
'Planet' Mr Brown has said public spending growth will slow over the next few years.
Earlier, during a round of media interviews, Mr Brown said the rate of growth in public spending would slow over the next few years but health and education would remain top priorities. But with all eyes on next summer's comprehensive spending review, he is unlikely to announce any major tax or policy decisions.
He will, however, unveil details of the government's spending plans for education for England, which will build on measures already announced to increase spending on buildings and infrastructure.
HAVE YOUR SAY I want to see an increased winter fuel allowances for our pensioners Paul, London Send us your commentsHAVE YOUR SAY I want to see an increased winter fuel allowances for our pensioners Paul, London Send us your comments
Improving the standard of education in schools, colleges and the workplace, was particularly important for Britain's future economic competitiveness, he stressed. He is also expected to unveil green measures in an attempt to steal back the initiative on the environment from Tory leader David Cameron.
Mr Brown is expected to say the economy looks on track to at least match - if not exceed - the Treasury's 2% to 2.5% prediction of economic growth for this year.
Mr Brown is also expected to unveil green measures in an attempt to steal back the initiative on the environment from Tory leader David Cameron.
The pre-Budget report will be Mr Brown's 10th
The chancellor may also decide not to go ahead with plans to revise down the economy's trend growth rate to 2.5% from 2.75%.
Speculation has focused on the possible taxes on the most polluting cars and for air travel, after the Stern review in October on climate change warned that action was necessary to combat global warming.Speculation has focused on the possible taxes on the most polluting cars and for air travel, after the Stern review in October on climate change warned that action was necessary to combat global warming.
Mr Brown could also announce a carbon trading scheme for supermarkets, banks, universities, hotels, hospitals and government departments, the Guardian newspaper predicts. The chancellor will also respond to some of the major Treasury-commissioned reviews which have reported over the past week.
'Wizard of Oz''Wizard of Oz'
Under the scheme, firms would either reduce their own emissions or buy credits from other companies giving them the right to pollute more than their agreed limit. Ahead of the speech the chancellor was denounced by his Conservative shadow George Osborne as a "Wizard of Oz" chancellor, whose loud boasts of economic success masked actual failure.
Mr Brown is also expected to announce a crack down on music and film pirates, with prison terms of up to 10 years for organised gangs, The Times reports.
Mr Brown said he would not give precise details of his report until he delivered it in the House of Commons, which is expected to be at about 1240 GMT.
The chancellor was denounced by his Conservative shadow George Osborne as a "Wizard of Oz" chancellor, whose loud boasts of economic success masked actual failure.
"It looks impressive but when you pull back the curtain there he is pulling levers that are not actually connected to the real world," he told BBC News 24."It looks impressive but when you pull back the curtain there he is pulling levers that are not actually connected to the real world," he told BBC News 24.
Living standards
According to a dossier produced by Mr Osborne, Britain's performance on growth, unemployment, tax increases, budget deficits and productivity is actually lagging behind that of other industrialised nations.
Much of this year's apparently healthy growth in the economy can be accounted for by the contribution of immigrants from eastern Europe, who have depressed earnings in some sectors, said the shadow chancellor.
There has been no "feelgood factor" because inflation has been rising faster than wages, driving real living standards for the majority down.
He also attacked the chancellor's plans to boost education spending, saying it had been heard before.
Liberal Democrat treasury spokesman Vince Cable said his party's research suggested wasteful government spending was now exceeding £30,000 a minute.Liberal Democrat treasury spokesman Vince Cable said his party's research suggested wasteful government spending was now exceeding £30,000 a minute.
"Gordon Brown's legacy may be to leave his successor with two enormous problems - personal debt and government waste," said Mr Cable."Gordon Brown's legacy may be to leave his successor with two enormous problems - personal debt and government waste," said Mr Cable.