Gordon Brown uses an interview in the FT to reveal that a third-term Labour government will aim to create a more flexible and competitive UK economy.

But speaking ahead of next week's publication of Labour's business manifesto, the chancellor did not give any indication of the long-term limits for taxation and public spending, warning that such a move would amount to creating “a third fiscal rule”.

Brown said the UK would use its presidency of the European Union to create a more effective and transparent competition policy in Brussels.

He added that the business manifesto would propose setting up an EU competition authority at arms-length from the European Commission, ensuring that “European competition policy is independent of politicians”.

The chancellor will today appear with Tony Blair in order to detail the effect of tax credits on working families.