UK budget aims to woo voters

Brown has a reputation for prudence

LONDON, England -- With a general election looming, UK Chancellor Gordon Brown is expected to unveil a budget package of up to £4 billion.

The chancellor has already said he intends to concentrate "targeted" measures at working families with young children, pensioners, savers, and investment in Wednesday's budget announcement.

And there has been widespread speculation that he will cut taxes across the board by widening the band for the 10 pence starting rate of income tax.

Prime Minister Tony Blair is widely predicted to call the general election for May 3 -- although the current foot-and-mouth outbreak has raised some doubts -- and Brown's Budget statement is likely to be the government's last big set piece.

According to the latest estimates, the public finances are on course to show a surplus of about £15 billion -- 50 percent more than the £10 billion that Brown predicted in November.

And, despite IMF warnings that a big pre-election giveaway could jeopardise further interest rate cuts by the Bank of England, most economists believe Brown can afford to give away £3 billion to £4 billion.

Labour has appeared anxious to woo the women's vote, and the chancellor is said to be planning measures targeted at families, including a "baby bonus" worth several hundred pounds.

There has also been speculation that maternity pay could rise, the time new mothers can take off work extended, and child tax credits increased.

Brown has also emphasised his desire to encourage enterprise and investment and has been looking at measures such as extending tax breaks for research and development to larger firms.

And there were press predictions on Wednesday morning of up to £500 million to recruit teachers, police officers and health staff.

But Shadow Chancellor Michael Portillo warned that spending by Labour would mean any tax cuts announced by Brown could not be sustained.

"Gordon Brown's commitment to a course of spending that outstrips what the nation can afford means that taxes would have to go up again and again if Labour were re-elected," said Conservative Portillo.

The Liberal Democrats urged Brown to use any money in his "war chest" to invest in public services rather than cutting taxes.

"Labour was elected to invest in health, education and pensions. Instead they stuck to and undershot the Tories' 'eye wateringly tight' spending plans," said Treasury spokesman Matthew Taylor.

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