Chancellor Gordon Brown has claimed the UK is enjoying its longest period of economic growth since the industrial revolution as he delivers his eighth Budget.

As he set out his tax and spending plans for the year ahead Mr Brown said there was a need to "combine a new confidence" in the UK economy with decisions which "lock in economic stability".

His growth forecasts for 2003 have come good, he said, in defiance of many predictions, at 2.3%, unchanged from his previous predictions.

He added Britain "is enjoying its longest period of sustained economic growth for more than 200 years".

He said growth in Britain in 2004 would be 3 to 3.5%, which along with the US would be the "fastest" of the G7 countries.

The Tories say households are paying 5,000 more tax under Labour.

The Lib Dems are pushing for measures to control household debt and to make the tax system fairer - although they were doing so without leader Charles Kennedy, who is missing the debate due to a "violent stomach bug".


Election

Mr Brown ruled out a further assessment of the five economic tests for euro entry, but said he would revisit the issue in next year's Budget.


Speculation ahead of the Budget centred on whether Mr Brown would find spare cash for a pre-election boost in public service spending.

A general election is widely forecast next Spring, making this the penultimate Budget before voters choose the next government.


The chancellor will set the scene for his three-year spending plans due to be unveiled this summer and is also expected to:

Announce plans to merge the Inland Revenue with Customs and Excise to tighten the Treasury's grip on tax policy and cut down on red tape

Unveil proposals to tackle tax avoidance by companies and individuals

Respond to a government report recommending the relocation of 20,000 civil servants from London to the regions, saving an estimated 2bn over 15 years

Alcohol, tobacco and petrol duties are expected to rise in line with inflation.

Housing is likely to be a key theme, with a big report on the issue published ahead of Mr Brown's speech.

Housing market

Mr Brown backed the Barker Review, published earlier on Wednesday, which recommended spending 1.5bn on doubling the production of low-cost housing.

He may unveil other measures to stabilise rising house prices.

The Institute for Fiscal Studies estimates that tax rises of up to 10bn will be needed in the next Parliament.



The Conservatives have already ridiculed Mr Brown as a "tax junkie" and are also accusing ministers of wasting money with profligate spending.
Shadow chancellor Oliver Letwin said tax rises since Labour came to power equate to about 5,000 per household.

If Labour secures a third term at the next General Election, "there will be another set of tax rises" to fill up Gordon Brown's "black-hole" in public finances, he told BBC Radio 4's Today programme.

The Liberal Democrats have been trumpeting their plans to cut Whitehall waste and focus spending on key priorities.

Any opinions as to how this will effect the stock market : especially in relation to different sectors ?

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