Brown to foster entrepreneurs

Gordon Brown today promised tax cuts for hard-pressed small businesses in next month's Budget, as he declared that producing the next generation of entrepreneurs was a New Labour priority.

The Chancellor's plan to reduce the cost of starting up a new business and to cut corporate tax burdens will infuriate the unions, which already feel under attack from the Government's drive to bring the private sector into public services. They believe Tony Blair has reneged on promises to improve workers' rights.

But Mr Brown argued this morning that encouraging wealth creation is the "essential driver of a higher standard of living and the surest long-term guarantee of better public services for all".

He added: "I want every young person to hear about business enterprise in school, every teacher to be able to communicate the virtues of business, every communityto value good business leaders as role models."

As the Cabinet headed off to Chequers this morning off for a brainstorming session on the Budget and public services, ministers were due to discuss their growing concerns over the plans for reforms of schools, hospitals and the rail system.

But top of the agenda is the Budget set for 17 April, which is expected to include some form of tax rise in order to invest millions more into the NHS. Reducing entrepreneurs' tax burden will also be set out as a a priority, alongside education and transport spending.

The Budget will forge a consensus for a "radical pro-enterprise and procompetition agenda", Mr Brown writes in today's Times. He states: "To those who say money would be better spent in other ways, my answer is this: we will make decisions to do what is right in health and public services, matching money to reform and outcomes."

The Chancellor's relationship with the City has been shaken by warnings from the leading fund managers that the Government has been damaged by its handling of Railtrack.

Some senior ministers were expected to tell Tony Blair this morning that it was essential to dispel the "fog of doubt and cynicism" over the Government if they were to push ahead with their reform agenda.

At today's meeting in Chequers - one of a number of political sessions the Prime Minister will have over the year - Health Secretary Alan Milburn was among those urging him to be more bold on pushing for reforms.

He warned that the growing cynicism among voters was "in danger of contaminating" their public service agenda.