Brown takes on Cameron in green pre-budget report

GORDON BROWN was today signalling big increases in fuel and car tax for motorists and sharp rises in the cost of flights as he made his Pre-Budget Report at Westminster.

The Chancellor took David Cameron on head-to-head as the new Tory leader marked his first anniversary.

In what is expected to be his last pre-budget statement as Chancellor before he takes over at No 10, Mr Brown was armed with the Stern Report on climate change.

And he made clear that a shift towards "green" taxation was now top of his agenda.

Mr Brown indicated that the freeze on petrol and diesel duty for motorists since October 2003 because of high oil prices was to end. And big increases in the cost of petrol and diesel were on the way this year and in future years.

But he is understood to have rejected claims to bring back the automatic annual rises in the fuel duty escalator brought in by Tory Chancellor Norman Lamont.

In addition, vehicle excise duty is also to rise with the burden falling on 4X4s and other gas guzzling cars. There will also be an increase in air duty aimed at reducing the number of cheap flights - especially internal ones between London, Edinburgh and Glasgow - to combat the greenhouse gas emissions of aeroplanes.

The news will cause a row as already Mr Brown and Transport Secretary Douglas Alexander have indicated an extension of road pricing and inner city congestion charging is on the way following last week's Eddington Report on transport. Mr Brown will indicate that much of the money mentioned in today's statement, which sets out the spending priorities ahead of next spring's Budget proper, is set to be directed towards education.

He will promise a 15-year programme of refurbishing primary and secondary schools, with specific plans for the 21,000 in England. Cash will flow through to Scottish schools under the Westminster block grant.

But he had good news on the economy which now looks on track to at least match if not exceed the Treasury's 2 to 2.5 per cent prediction of economic growth.

And he hopes that Mr Cameron's c commitment to the environment and "green taxation" will make it difficult for the Tory leader to oppose his plans.

Mr Brown said before his Commons statement: "We have stability in the economy. The problem now is to prepare this economy and this country for the future.

"You will not be able to do this unless you invest heavily in the education and training of young people, of children, young people and adults who are already in the workplace."

But he was denounced by his Conservative shadow George Osborne as a "Wizard of Oz" chancellor, whose loud boasts of economic success masked actual failure. He said: "It looks impressive but when you pull back the curtain there he is pulling levers that are not actually connected to the real world."

According to a dossier produced by Mr Osborne, Britain's performance on growth, unemployment, tax increases, budget deficits and productivity is actually lagging behind that of other industrialised nations.

Liberal Democrat treasury spokesman Vince Cable said: "Gordon Brown's legacy may be to leave his successor with two enormous problems - personal debt and government waste."

Meanwhile, Mr Cameron hit back at claims that he had created a 'policy light' Tory Party.

Celebrating 12 months in the job, the Witney MP promised: "You're going to hear real grit in terms of how we're going to change this country for the better."