Brown borrows big to kickstart economy

By Adrian Croft

LONDON (Reuters) - Prime Minister Gordon Brown tries to kickstart the stalling economy on Monday, spending billions of borrowed pounds on tax cuts in a bid to stop a recession turning into a slump.

The package, expected to total up to 20 billion pounds, will include extra public spending designed to grease the wheels of the economy.

Chancellor Alistair Darling is also expected to announce plans to plug the hole in state finances by raising taxes in future, including a political shift in the form of a sharp rise in income tax for high earners, media reports say.

"I don't see this as a gamble. I see this as necessary, responsible action," Brown told the BBC.

Despite his confidence, the stakes will be high when Darling stands up to unveil the plan to parliament at 3:30 p.m.

Britain is sliding into recession with house prices slumping, unemployment rising and manufacturing output shrinking. Brown argues that the government must act now to avert permanent damage to the economy.

The package is expected to include a cut in sales tax and help for businesses, low earners and struggling home owners.

Although Brown's handling of the financial crisis has lifted his flagging popularity, a poll published on Sunday still showed the Labour Party trailing the Conservatives by 11 points, a wider margin than some other recent surveys.