EU states attack British spending plans

Britain's public spending plans and rising deficit have been attacked by other EU member-states, a sign of growing concern about…

Britain's public spending plans and rising deficit have been attacked by other EU member-states, a sign of growing concern about a breakdown of fiscal discipline in Europe.

The Chancellor of the Exchequer, Mr Gordon Brown,will next week face criticism from fellow finance ministers over his ambitious plans to rebuild Britain's public services.

They will argue that his plans could put Britain in breach of the EU's stability and growth pact.

The criticism reflects concern that big member-states, particularly France and Germany, are undermining the euro by failing to control their deficits.

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But it is the first time Mr Brown, normally regarded as a model of fiscal rectitude, has been singled out for such criticism by his peers.

Mr Brown's economic stewardship was praised by the European Commission last month in its report on Britain's public finances seen as an attempt by Brussels to make it easier for the minister to take the UK into the euro.

Mr Pedro Solbes, EU monetary affairs commissioner, warned Mr Brown's spending plans, coupled with an "optimistic" growth forecast, would take Britain close to the stability pact's deficit ceiling of 3 per cent of GDP.

But crucially Mr Solbes's report said Mr Brown need not take any remedial action such as raising taxes or cutting spending because the UK's underlying public finances were so strong.

That lenient approach proved too much for many member-states, which insisted this week on a tougher Commission report.

The revised paper deletes the key paragraph which says Mr Brown could continue to run small deficits in the medium term "without jeopardising the sustainability of public finances in the longer term".

The dispute is embarrassing for Mr Brown, but unlikely to lead to any change in his policy.