Brown: "Iron chancellor"

No Extra Cash for Public Services Insists Brown

Speaking at the end of the meeting of the leaders of the seven most industrialised countries in Denver, Mr Brown indicated that it might be possible to shuffle cash between departments at some stage, but not this year.

The Chancellor is due to unveil his budget in nine day's time. His big problem is that he promised before the election to stick to the Conservative spending plans for his first two years in office.

Over the weekend newspapers reported that a u-turn was imminent. Government sources apparently suggested that extra money for key services might be made available by shuffling cash between departments.

But Mr Brown has insisted this would not happen until 1999 at the earliest.

"The purpose of the comprehensive spending reviews is to look at the use of resources in existing departments, and of course if we find that resources are not being properly used we will transfer resources," said Mr Brown.

He said there would be no extra money for health and education except what they're able to generate themselves by improving efficiency.

There might be some extra cash for education if falling unemployment cuts the benefits bill.