Blair steps into fray over Brown's spending review

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Tony Blair has intervened after wrangling between ministers forced the delay of the announcement of Gordon Brown's three-year spending review.

Tony Blair has intervened after wrangling between ministers forced the delay of the announcement of Gordon Brown's three-year spending review.

David Blunkett, the Home Secretary, and Geoff Hoon, the Defence Secretary, are still locked in negotiations with the Chancellor over their budgets.

With above-inflation increases already announced for health and education, they fear their departments are to bear the brunt of economies elsewhere in Whitehall. Mr Brown, however, is critical of how the two departments handle their existing budgets.

A meeting between senior Home Office and Treasury officials is understood to have broken up in acrimony this week.

The Treasury had pencilled in the end of June for a statement by Mr Brown on the spending review, but it has been put back to mid-July to allow time to resolve the arguments. A Downing Street spokesman said yesterday: "It's always the case that the Prime Minister takes a personal interest in these matters."

The Home Office is pressing for more cash for extra jails to accommodate the rising prison population and for community support officers to back up the police. It is also arguing that combating terrorism and introducing identity cards carry an extra cost for the department.

The Ministry of Defence, meanwhile, is arguing that its budget is under strain because of Britain's commitments in Iraq, expected to continue for at least 18 months.

By the time Mr Brown delivers his statement, the Government hopes to have produced most of its five-year plans for the future of public services. It has delivered its blueprint for health this week, with its education plans expected within the next fortnight. Its crime strategy, however, has been held up because of the Home Office's concentration on the Bichard inquiry into the police investigation of the Soham murders.

The Government now hopes that Labour's campaign in two parliamentary by-elections to be fought in Leicester South and Birmingham Hodge Hill on 15 July will be boosted by the announcement of the spending plans.

The party is defending a large majority in each seat, but has been rattled by its poor performance in this month's European and local elections.

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