Golden Rule remains intact as Brown looks North

Gordon Brown has claimed that his Golden Rule is being met in this economic cycle by a margin of £8bn. In his pre-Budget report the chancellor also claimed the rule would be met in the next cycle.

Brown aid that growth for 2004 would be 3.25% and predicted that 2005 growth was projected at 3 to 3.5%. He said that·public spending would rise to £579bn in 2007-08, £607bn in 2008-09 and £634bn in 2009-10.

Brown also announced that the government was to establish science cities in the North of England through a £100m technology investment programme. Brown said the first three sites would be in Manchester, Newcastle and York. Brown also announced a £2.5bn investment in science.

Among other measures announced today was a £20m fund for the Carbon Trust to develop innovative alternative energy sources and a plan to pilot 'mixed communities' in private estates.

Inland Revenue is also to create a small business unit, which could lead to a 'single tax return' for small businesses.

Brown announced plans for the further location of civil servants outside London including 1,230 from the Ministry of Defence to Yorkshire. A total of 20,000 civil servants would be relocated out of London by 2010.

Shadow chancellor Oliver Letwin branded Brown “Sir Waste-a-lot” and said that Brown had broken the Golden Rule, and was borrowing to spend rather than invest. He said that independent experts estimated that the Treasury had a £10bn shortfall.

The rule states that the government will not spend more than it raises in tax during an economic cycle,