Brown ends spending spree in budget

Britain's Chancellor of the Exchequer Gordon Brown slammed the brakes on public spending growth on Wednesday but said that rather than crimping frontline services, one in 10 bureaucrats would have to go.
Unveiling his eighth annual budget to a packed House of Commons (lower house), Brown also painted an upbeat assessment of the world's fourth-largest economy which he said had now enjoyed its longest period of growth in over 200 years.
Brown has been under pressure from sluggish tax receipts to end three years of rapid growth in spending on key public services like schools and hospitals rather than bust his own rules designed to restrain government borrowing.
With tax rises unacceptable with probably just over a year to the next general election, Brown raised public borrowing slightly and said this summer's spending review would halve spending increases to a pace of around 2.5 percent a year.
"But with administrative costs cut and with wider efficiency, we will be able to deliver further substantial increases in resources direct to the front line, to patients, pupils and users," he said, to cheers from Labour MPs.
Brown said he would slash the civil service by 54,000, in part by merging the country's two tax collectors - the Inland Revenue and Customs & Excise - and by sharply reducing staffing levels at the Department of Work and Pensions and Department of Education.
The resulting 20 billion pounds of money saved from the job cuts would be channelled into pay for more teachers and nurses rather than lower taxes, he said.
Brown announced that the country's cherished National Health Service, which has already seen a massive spending rise in recent years, would enjoy 7.2 percent annual real terms spending rises, while education spending would rise nearly five percent a year.
For the new fiscal year 2004/05, starting in April, Brown predicted a shortfall of 31 billion pounds, a figure analysts think is just as over-optimistic.
On Wednesday, he raised borrowing by another three billion pounds over the next two years, saying the current fiscal year would end with a deficit of 37.5 billion pounds, followed by 33 billion of borrowing in 2004/05 and 31 billion the year after.