Brown vows crackdown on dodgers

ECONOMISTS say the Chancellor avoided more painful decisions on tax increases by the simple expedient of assuming that the economy would grow faster - and by relying on bringing in £1.3bn from tougher action on tax avoidance.

He did little immediately to slow the consumer boom, concentrating tax rises on business. So interest rates are still likely to go up.

Brown previously budgeted assuming that the UK economy would grow at an underlying 2.25% a year. Now he is assuming 2.75%. The faster the growth, the more tax revenues rise. Citing prudence, he is basing his forecasts on a 2.5% growth rate - still less prudent than previously.

He aims to pull in £450m from stamp duty avoidance, £550m from a crackdown on 'oil fraud' and £320m from VAT curbs.

Nilesh Shah, tax partner at accountants Blick Rothenberg, said: 'He has assumed he can claw back nearly £2bn from companies evading taxes. Businesses are likely to see more of the Inland Revenue and Customs & Excise than they would like.

'This was not a good Budget for business. Brown makes a big issue of helping firms by cutting corporation tax, but his own figures show he is taking away far more than he is giving back.'

Brown was assuming that he will get an extra £3.9bn from employers and £3.55bn from employees in NI contributions. 'This is a considerable sum going out of individuals' and businesses' pockets.'