Building strong economy will help everyone, says Brown

Chancellor Gordon Brown today defended himself against accusations that he could dig deeper into Treasury funds to help pensioners - and warned against complacency in the face of optimistic forecasts.

Chancellor Gordon Brown today defended himself against accusations that he could dig deeper into Treasury funds to help pensioners - and warned against complacency in the face of optimistic forecasts.

The Chancellor told GMTV that free TV licences for over 75s would be a "practical recognition" of the needs of pensioners.

He added that the Government was helping them with a new minimum income guarantee of £78 and the £100 winter allowance.

"We are trying to recognise the practical needs that people have and we are trying to do it in the fairest possible way where people have special needs.

"At the same time we recognise that the older the elderly are, the more likely they are to be in poverty."

He added: "What you have got to do is to create a stronger economy so that we can sustain the improvements in health and education and do more for pensioners and do more for children.

"You mustn't relax and you mustn't be complacent. There's a job to do and we just get down to it."

But Mr Brown was facing increasing criticism today for failing to spend some of the Government's multi-billion pound war chest.

Liberal Democrat Treasury spokesman Matthew Taylor said: "It is not prudent for public services to build up a huge war chest now, only to spend it on the General Election and, no doubt, rake it back again.

"That is boom and bust for the public services even if it is not boom and bust for the economy."

John Edmonds of the GMB union said schools, hospitals and public transport all needed a share of Mr Brown's £9 or £10 billion "treasure chest".

"The difficulty is that money for the public services takes quite a long time to get through the system.

"If he is trying to influence people's thinking before the next election he may be missing the boat."

Shadow Chancellor Francis Maude said Mr Brown had the money because Labour had put up taxes.

"It is very easy to have a lot of money in the public coffers if you just increase taxes.

"Tony Blair said before the election they had no plans to put up taxes at all and yet they have gone up in stealth taxes by £40 billion - the equivalent of £1,500 for every taxpayer - so it is not particularly difficult to have public finances looking strong."

Mr Brown had inherited a economy that was among the fastest-growing in Europe but was now one of the slowest, said Mr Maude.

All three were speaking on BBC Radio 4's Today programme.

Later Mr Brown said the Government was already spending more on health and education.

"What I am not going to is return to the situation we had in the 1980s where public spending was allowed to get out of control on the basis of one year's surplus.

"We have got to earn the money we are going to invest in our public services."

Asked about the next public spending round, he said: "Of course we will want to do better by health and education in the next round and of course we will want to inject more money, but it will be within the fiscal rules we have set."