Brown gets unexpected birthday present

Brown gets unexpected birthday present

	Published : Tue, 21 Feb 2006 12:05 By : Phil Bateman Print this Story

LONDON - Chancellor Gordon Brown received a surprise birthday present yesterday as official figures revealed that the country's budget surplus hit £15.3 billion in January. The latest figures released by the Office for National Statistics come just weeks before Mr Brown is due to present the Budget in March.

Analysts feel that this could very well be Brown's last budget as he is gets ready to prepare for a move to 10, Downing Street. The new figures were able to hit record highs thanks to the surge in corporate tax receipts especially form the North Sea oil companies, which have had a bumper year because of the rising oil prices.

The data also means that Gordon Brown has a fair chance of keeping his public sector borrowing target at £37 billion and limiting the budget deficit at £10.5 billion. The surge in tax receipts also means that Brown can avoid offending the electorate with fresh taxation.

"The strength of the public finances in January effectively guarantees that Mr Brown will be able to avoid making any major tax hikes or significant spending cutbacks in March's Budget," said Howard Archer, the chief UK economist at Global Insight.

"Furthermore, Mr Brown had already alleviated the near-term pressure to tighten fiscal policy to meet his "Golden Rule" [of balancing the budget over the economic cycle] by moving the goal posts yet again in December with a further extension of the economic cycle." There was an overall 14 percent increase in revenues last month as compared to January 2005.

This was mainly possible due to the 52 percent increase in tax receipts. The Treasury has been harping on the increased tax receipts for quite sometime now and that prediction finally bore fruit last month. "One must remember that these are only the figures of a single month – but as Gordon Brown prepares for what could be his last budget in March 2006, he will be sleeping a lot easier. There is no longer the same pressure to cut spending or raise taxes," said Simon Wallace of the Centre for Economics and Business Research.