Brown hails spending victory over Brussels

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Election 2001
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Special report: the European commission

Larry Elliott and Andrew Osborn in Brussels
guardian.co.uk, Saturday 2 June 2001 10.14 BST

Labour was last night claiming victory in its battle with Brussels over Gordon Brown's extra investment in the public sector after the European commission abandoned plans to call on the chancellor to cap his spending plans.

Sources close to Mr Brown said that the EC had been forced to back down following the chancellor's insistence that Britain should be free to decide on its own levels of tax and spending. "We have won an important point of principle," one source said last night.

The commission's climb down was seized upon by Labour spin doctors as proof that Mr Brown is well able to stand up for Britain's interests in Brussels despite Tory claims during the election campaign to the contrary. It was made clear last night that the chancellor would also stand firm at next Tuesday's meeting of EU economic and finance ministers and reject calls for a harmonised rate of VAT to be levied on digital products sold over the internet.

Mr Brown was initially angered when a draft copy of the commission's so-called broad economic policy guidelines demanded that he hold spending at no more than 37.3% of output between 2002 and 2003.

In May Pedro Solbes, the EU's economic affairs commissioner, insisted that he saw no need to modify the guidelines but officials conceded yesterday that Mr Brown's confrontational style had paid off and the necessary amendments had been made.

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