Brown plans duty-free boost

Gordon Brown will use tomorrow's Budget to propose a sevenfold increase in dutyfree limits for transatlantic shoppers.

The Chancellor will say the allowance should jump from the current £145 level to about £1,000.

It would mean anyone travelling on business or holiday to places outside the EU could avoid VAT and duty charges on purchases such as clothing, jewellery or electrical gadgets.

Tens of thousands of shoppers already take advantage of the strong pound to shop abroad and the boost could mean that cheap flights pay for themselves.

The plan will need agreement from the EU to go ahead, because the current limit is set in European law.

Footballer Wayne Rooney's fiance Coleen McLoughlin was among travellers stung for unpaid duties last year. She was charged £3,000 at Manchester airport after a £15,000 shopping spree in New York.

The duty-free threshold has not been raised since 1994 and Mr Brown believes a rise would be popular with the public and give Europe a more global outlook.

Making Britain and Europe more competitive to cope with the booming Chinese and Far East economies will be a key theme of the Budget. Mr Brown will single out creative industries such as advertising, computing and the media for help. He will commission an inquiry by George Cox, head of the Design Council, to see how British expertise in the fields can be used to steal a march on the "tiger" economies.

The Chancellor was putting the finishing touches to his pre-election Budget today. He is expected to aim to boost Labour's popularity with a cut in stamp duty, a rise in tax credits for pensioners and a freeze on whisky duty.

Labour is banking on Mr Brown's ninth Budget to seize back the political agenda from the resurgent Tories. Whitehall experts think the Chancellor-can afford some tax cuts and spending increases but are playing down expectations of a giveaway.

The Chancellor foreshadowed Budget moves to boost science and development today in a speech to foreign ministers in London. "Britain and Europe must remove unnecessary barriers to enterprise and make the necessary public investments in education and infrastructure," he said.

Mr Brown is selling himself as a prime minister-in-waiting by explaining his views on the future of Britain. Last night, he urged compulsory history lessons until 16 to boost national pride and said Britain should stop apologising for its past.