Budget will see ‘tax breaks and increased spending’

Chancellor Gordon Brown could use this month’s Budget to introduce a package of tax breaks and spending rises, according to some of his closest allies.

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In what will be the last Budget before a general election, former chief economic adviser to the Treasury, Ed Balls, told the Financial Times that Brown will meet his fiscal rules ‘with a margin to spare’, leaving the chancellor with leeway to cut taxes and increase public spending.

The comments follow a recent Mori poll that showed the public has more confidence in Brown’s handling of the economy for three years.

The poll found that 43% agreed that in the long term, the government’s policies will improve the state of Britain’s economy. The same number disagreed, but it is the first time that the response has moved out of negative territory since May 2002.

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