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Golden Age squandered, claims Tory Osborne; POLITICS.

Gordon Brown was accused yesterday of squandering a golden age for the global economy as he prepared to deliver his 11th and almost certainly final Budget.

The Chancellor's Tory counterpart George Osborne said although Mr Brown liked to wallow in "self-congratulation", his economic achievements were actually the result of international forces.

"It is the case that for the last 15 years or so the whole world has enjoyed low inflation on a global scale, and globally low interest rates," Mr Osborne said.

"I know Gordon Brown takes credit for that - it's probably more to do with the Chinese workforce.

"But the question we face as a country is why didn't we make use of that time to make our economy much more competitive, to create that lower and simpler tax system I think we're going to need to compete in the future."

He added: "If all Gordon Brown can do is claim credit for the global macroeconomy then there are other people and other factors that have been at work."

Mr Brown is expected to introduce a sprinkling of "green" measures while maintaining an iron grip on public spending when he outlines his latest financial package on Wednesday.

He will reportedly announce additional cuts in the civil service, lifting the target for shedding 70,000 jobs to more than 100,000, and stress that public sector pay rises must be held below two per cent.

However, there could be more money for schools, with some predicting a commitment to raise the annual education budget from pounds 70 billion to pounds 90 billion by 2011.

The six per cent increase would be almost double the rate of inflation, and could be financed by "privatising" student loan debt to realise a lump sum. Among the environment ally-friendly proposals under consideration is offering incentives for energy-efficient products, possibly by cutting the rate of VAT on them.

Campaigners have also been putting pressure on the Chancellor - widely expected to succeed Tony Blair as Prime Minister this year - to take the populist route by making concessions on stamp duty or inheritance tax.

But in the unlikely event that Mr Brown has leeway for tax reductions, they are far more likely to be targeted at business.

A Treasury spokesman said they never commented in advance on the contents of the Budget.

Meanwhile, venture capitalist Sir Ronald Cohen, a key City ally of Mr Brown, warned that the wealth divide in Britain had become so marked it risks provoking "violent reactions" from the poor.

Asked whether the massive wealth of a City elite was disfiguring society, he said it was, adding: "I think we're at the top of the cycle.

"I think the pendulum has swung too far."

Tax burden, p32 Budget special, Thursday

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Publication:The Birmingham Post (England)
Date:Mar 19, 2007
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