Brown Set to Face Brussels' Scorn over Britain's Debts
Tuesday, 10 January 2006
Chancellor Gordon Brown's reputation for 'prudence' is set to suffer a blow tomorrow when the European Commission meets to decide whether it will take formal action against the UK for failing to meet EU targets on levels of public debt .
The UK is a member of the EU's 'Stability and Growth Pact', which sets a budget deficit ceiling of three per cent of gross national income. Borrowing reached 3.2 per cent of GNI in the financial years to March 2004 and March 2005, and is expected to rise to 3.4 per cent in 2005-2006. The European Commission is likely to open an 'excessive deficit procedure' against HM Treasury which, in addition to being devastating to the Chancellor's reputation, could lead to further sanctions being imposed at a later date.
Timothy Kirkhope MEP, Conservative leader in Brussels, said:
"The British economy is actually running a bigger deficit than the Government lets on because Gordon Brown's accounts conceal massive PFI and Network Rail debts.
"The Chancellor spins himself as a prudent man but even the European Commission is showing him up as a reckless spender. Mr Brown can just about get away with spending more than Britain earns whilst the economy is growing but he is lining us up for a hard knock if growth begins to slow down.
"The Chancellor should come clean and explain how he will pay off our national debt mountain: tax rises or spending cuts. Perhaps he is planning a move to Number Ten before these difficult economic decisions need be taken."
ENDS
