UPDATE 3-UK’s Brown pledges reform, clashes on economy

* Brown tackles public disgust over expenses scandal

* Proposals could be overture to smaller opposition party

* Parties clash over tax plans and economic recovery

(Adds details on latest polls)

By Matt Falloon

LONDON, April 7 (BestGrowthStock) – British Prime Minister Gordon
Brown said on Wednesday he would overhaul the scandal-hit
parliament and take more steps to secure an economic recovery if
his Labour Party defied the polls and won the May 6 election.

His plan for sweeping political reforms might appeal to the
smaller opposition Liberal Democrats, whose support Labour may
need to form a government if it fails to secure an outright
majority in what looks like the closest race in 20 years.

Labour has trailed the opposition Conservatives in the
opinion polls since January 2008, but the gap has narrowed and
the latest surveys point to a result in which no single party
would have an overall parliamentary majority. [nUKPOLLS10]

The prime minister said voters would be given a say on
constitutional reforms in a referendum before October 2011,
including changing how members of parliament (MPs) are elected
and the possibility of an elected upper chamber.

The proposals are in part a response to public disgust with
politicians after many MPs abused their expense allowances by
claiming money for items such as a duck house or dog food.

“I would … take no joy in victory if it comes without a
mandate to get rid of the old discredited system of politics,”
Brown said in a speech a day after setting the election date.

He called for parliaments to be elected for a fixed term,
instead of the current system where the prime minister can call
an election at any time up to a five-year maximum.

The measures will be seen as an attempt to woo the Liberal
Democrats, who have long argued for political reform, including
a switch to proportional representation.

But the Liberal Democrats, Britain’s third biggest party,
dismissed the proposals.

“How on earth are we supposed to believe anything that
Gordon Brown says about political reform when they’ve done
nothing for 13 years?” said Liberal Democrat leader Nick Clegg.

ECONOMIC RECOVERY

Conservative leader David Cameron used a bruising
parliamentary session to accuse Brown of wrecking the economic
recovery with plans to raise payroll taxes.

With the parliamentary chamber in uproar, Brown hit back by
accusing the Conservatives of putting growth and jobs at risk
with their plans for public spending cuts to reduce the gaping
budget deficit.

Arguments about the best way to nurture the hesitant
economic recovery are set to dominate the election campaign, in
which the Conservatives are trying to end 13 years of Labour
rule.

“This prime minister would wreck the recovery by putting a
tax on every job, on everyone earning over 20,000 (pounds,
$30,470 a year), a tax on aspiration, a tax on every business in
the country — this government would wreck the recovery,”
Cameron said.

Several business groups and 38 large employers have backed
the Conservatives’ opposition to a planned rise in National
Insurance, a payroll tax. Brown said the Conservatives had
“deceived” them.

Brown said that to withdraw six billion pounds from the
economy, as he says the centre-right Conservatives plan to do,
would put jobs, businesses and growth at risk. “We cannot cut
our way to recovery but we could cut our way to double-dip
recession,” he said.

Brown said in a Channel 4 News interview that his party
would make an election pledge to hold the basic income tax rate
at 20 percent. [ID:nLAL004382]

Investment Tools
(Additional reporting by Adrian Croft, Estelle Shirbon, Peter
Griffiths and Caroline Copley; editing by Tim Pearce)

UPDATE 3-UK’s Brown pledges reform, clashes on economy