Tax cuts 'aren't bribe for early election'

GORDON Brown yesterday played down talk of an early general election amid suspicions the Pre-Budget Report would amount to a pre-poll bribe for voters.

The Prime Minister insisted his attention was "100 per cent" focused on trying to revive the beleaguered economy, ahead of Monday's report, in which Alistair Darling, the Chancellor, is expected to unveil tax cuts that the government hopes will fuel spending.

"My undivided attention is on the economy. I am not thinking about anything else," Mr Brown said. "It is 100 per cent of my attention, and you can just discount all of these stories."

Mr Brown did not go as far as to rule out any particular date, but sources close to the Prime Minister insist that it is not on their minds.

Allies of Mr Brown are reported to have urged him to go for a June poll. Last year the Prime Minister failed to dispel rumours that he was planning an election shortly after taking over from Tony Blair. The frenzied speculation ultimately backfired.

After months of languishing behind David Cameron, the Conservative leader, in the polls, Mr Brown has repositioned himself with his handling of the economic crisis. The Tory lead over Labour was this week slashed and bookmakers cut the odds for an election in the first six months of next year from 11/4 to 2/1.

Next week's Pre-Budget Report will also contain measures to make banks lend more readily to small businesses. Mr Brown's spokesman said that "all options" were being considered to encourage greater lending, fuelling speculation the government could threaten banks with nationalisation unless they free up credit. Asked about legal action, he said: "Obviously we need to continue to look at all options."

Public borrowing is expected to soar as a result of the planned tax cuts. After a short-term fiscal stimulus package, ministers may be forced to raise taxes to pay off spiralling public debts. Stamp duty could be changed to revive the housing market, while reducing VAT on goods could kick-start spending.

Mr Brown yesterday admitted he was wrong to boast that as Chancellor, he could end "boom and bust". Asked if his pledge was among the things he thought he had got wrong, he said: "Yes. Of course."

Chris Grayling, the shadow work and pensions secretary, said: "Gordon Brown certainly owes the British public an apology for racking up the highest borrowing this year for any major nation.""