Brown squares up for a fight

THE rumour mill is on turn again – and for a change it's not the Tories who are at the receiving end. Westminster is awash with speculation – just what is Gordon Brown up to?The Chancellor is a proud man.

By Graham Dines

THE rumour mill is on turn again – and for a change it's not the Tories who are at the receiving end. Westminster is awash with speculation – just what is Gordon Brown up to?

The Chancellor is a proud man. And he has been deeply hurt by Tony Blair's refusal to grant him a seat on Labour's ruling National Executive Committee.

Mr Brown is also reeling from the Prime Minister's decision not to put him in charge of Labour's election manifesto planning, which he undertook for the 1997 and 2001 elections.

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Gordon Brown pumped up the volume at Labour's conference in Bournemouth six weeks' ago, declaring the party was at its boldest and its best when it was "Labour."

This contempt for "New Labour" was dismissed the following day by the Prime Minister, who famously declared he had no reverse gear – that is he was proud to be New Labour. This rebuff for Mr Brown saw Labour delegates with a split personality – they had cheered the Chancellor on the Monday and then Tony Blair the following day.

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Mr Brown returned to Scotland in a huff, although hiss mood of course has considerably brightened, and rightly so, by the birth of his son John.

Now he's back at his desk, and has put the cat among Tony Blair's pigeons by casting doubts on some aspects of the controversial European constitution.

The Prime Minister has refused a referendum on the constitution. Could the Chancellor be about to demand one, and if so, would he survive in Tony Blair's Cabinet?

Briefings galore are flooding out of the Treasury at the Chancellor's grim mood. Challenging Tony Blair would be a risky strategy: should it fail, Mr Brown's political career would almost certainly end.

Mr Brown famously stood aside for Mr Blair to take Labour to two landslide election victories. But there are muttering among Labour MPs and activists against the Prime Minister and Gordon Brown may not be prepared to wait indefinitely for the chance to fulfil his dream of leading Labour.

Iain Duncan Smith, in his farewell appearance at Prime Minister's Questions yesterday, said to laughter that he had a sixth sense on leadership challenges. He warned Mr Blair to be careful – and Mr Brown nodded in agreement.

The Tory leadership challenge and the accession of Michael Howard have dominated the news agenda for the past few weeks. With the Tories returning to some sort of normality, the focus returns to the Blair-Brown feud.

Earlier in the week, the Chancellor demanded categorical assurances that Europe would abandon efforts to harmonise taxes, demanding the idea should be explicitly ruled out in the new constitution for the European Union.

He pointed today that the European Commission was still pushing to harmonise VAT and remove Britain's opt-out from charging VAT on children's clothes and shoes.

Mr Brown said the rest of Europe's relatively poor economic performance now proved that a "federal fiscal policy" was not the way forward.

He told EU finance ministers that continental Europe was failing economically while the UK economy was flourishing. And, while tax harmonisation might be the way forward for a "sheltered trade bloc,", it was not the future for the EU member states in a competitive global market.

What was needed was an effective economic reform strategy, and a categorical end to tax harmonisation efforts.

Such strong words shocked the EU. And they will have caused Tory Blair, an enthusiastic supporter of the constitution, deep problems. He and his Chancellor appear deeply divided.

Liberal Democrat leader Charles Kennedy tried to get Mr Blair at Prime Minister's Questions to say how Mr Brown's fear of "fiscal federalism" squared with his own view that the constitution was merely a "tidying up exercise.

Mr Blair side stepped the question. "The European constitution is a very important document. Whether, however, it alters fundamentally the relationship between the member state and the European Union is the issue."

Indeed it is – and the overwhelming majority of the British people are not happy about it. Neither, it seems, is the Chancellor.

ESSEX stations are sharing in a modernisation spending package from the Strategic Rail Authority's Rail Passenger Partnership.

Junior transport minister Tom McNulty said that in the East of England, Clacton-on-Sea, Colchester, Colchester Town, Ingatestone, Kelvedon, Manningtree, Marks Tey, and Wivenhoe would all benefit from the cash injection, as well as stations on the Cambridge to King's Lynn.

BURY St EDMUNDS Tory MP David Ruffley has signed an Early Day Motion in the House of Commons, calling on the Government to urge dairies and multi-retailers to give a fair deal to farmers on the price of milk.

Mr Ruffley said: "Dairy farmers in my constituency have expressed their concern about the uneconomical farm-gate price of milk and I support the National Farmers' Union's campaign to highlight this issue.

"It is clearly important for Parliament to put what pressure it can on big retailers to ensure they do not squeeze our dairy farmers on price so hard that they go out of business."

SMALL business voters are deserting Labour and the Conservatives in droves, according to a survey conducted by retailer Office World. Across the six counties of the East of England, support for Labour among small businessmen dropped from 15% to 11 while the Lib Dems saw an increase in backing form 18% to 11%. The Conservatives lead with 37%.

Office World's quarterly business survey, published today, blame dissatisfaction with the Government and the turmoil of yet another Tory leadership contest for the rise in Lib Dem support

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