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Embattled Brown puts big-spending Budget on hold
Nicholas Cecil and Paul Waugh25 Mar 2009
GORDON BROWN appeared to retreat from ordering a new giveaway Budget to stimulate the economy today.
Speaking in New York the Prime Minister stressed that monetary policy and interest rates were just as important as tax cuts or higher spending.
"It is the combination of all these things that makes a difference," he said. His comment came a day after Bank of England governor Mervyn King broke ranks with No10 by issuing a public warning against another increase in borrowing to spend the way out of recession.
Although Downing Street denied there was any split with the Bank over finance policy, the gap between them was laid bare this afternoon when Commons leader Harriet Harman, standing in at Prime Minister's Questions, refused three times to endorse Mr King's remarks.
Liberal Democrat deputy leader Vince Cable jeered that the Governor had staged "a very British coup d'etat". For the Tories, William Hague said Mr Brown had "lost control of both the public finances and public policy".
Asked directly about the reported split during his New York appearance, Mr Brown glossed over the divide but emphasised that Mr King would "do what's necessary" to beat the recession.
"What the issue is actually now, is whether we are prepared, given what happens over the next few months, to do what's necessary to resume growth in the economy.
"And I think if you put that question to Mervyn King he will say - as he said when he signed the G20 communique - we have got to take the action necessary to restore growth."
At the same time, Mr Brown sharply downplayed expectations of a global agreement being signed at next week's G20 summit in London on tax and spend measures to stimulate the economies of the world.
Foreign leaders have warned No10 that they have already passed their national budgets for the year and it is too late to rewrite them for the G20, prompting fears that the summit will be seen as a failure.
"Every country will have its own timing for announcing fiscal and monetary decisions," said Mr Brown. "Nobody is trying to upset that timing."
A split between Barack Obama and European leaders has opened ahead of the summit, with the US President appearing angry that other EU countries seem happy to let America spend billions on boosting the economy, while they just ride on its coat tails.
"All of us are going to have to take steps in order to lift the economy," President Obama said in a televised press conference last night.
"We don't want a situation in which some countries are making extraordinary efforts and other countries aren't with the hope that somehow the countries that are making those important steps lift everybody up."
Mr Brown is on the second leg of a 17,500-mile tour to drum up support for the summit.
He will later have talks with UN Secretary General Ban Ki-Moon before travelling to Brazil and Chile.
Reader views (17)
Gordon Brown does not know what he is doing. He should be removed from his position of power immediately before and further damage is done.
- Jethro Payne, Streatham Common, 26/03/2009 09:23
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Only when Brown quits or is voted out/sacked will UK start to build again
- Mike, London England, 26/03/2009 09:05
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M.O'Brien, london.uk
£100 million is not enough for your scheme as there are over 60m people in the UK.
- Tom W, London, 26/03/2009 08:19
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If Mr Brown wants to really help people then the council tax should be capped.
- Stan White, leeds, 26/03/2009 05:03
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What is wrong with the Monarchy. The Governor General of Australia Sir John Curr sacked a corrupt Prime Minister, its time the Queen did the same? This nation is on the verge of national disaster. The partying has to stop! The National disaster that hasn’t worked through the system yet. We need a national day of Prayer because whole armies could not have done the damage this one man has done. There is nothing left in the kitty. We have radical new thinking. Re- visit the Thatcher reduction of taxes and encourage business. Stop strangling business with thousands of regulations and penalties. The EU has passed 140,000 unreadable laws no one has read nor can they be read. Does the Queen understand that disaster is coming on this nation. As Queen Esters uncle said “ you will not be able to sit in the Palace and not be effected” No wonder our Guilt sales have collapsed and in this way the world has judged us and our £ as unfit. The Prime Minister regarded as a buffoon. Our people are ripped off to the tune of £Trillions while the rich skim off £millions and £Billions. What about the EU& its corruption where 95% of the EU Budget is unaccounted for/ missing according to the EU Auditors who refused to sign off the books for 14 years. British tax payers pay in £30million a day= £12billion a year = £168billions over 14 years 95% unaccounted for. We need that money! Half our Gold reserves were sold by Brown for $275oz,it reached $1070oz. Phone/write to yr MP. Demand he acts
- Peter, Camberley UK, 25/03/2009 21:28
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i've said it before and here it is again.
for less than £100 million the entire economy could be kick started. i'm not the only one to have this notion.
give every man, women and child one million; some will
save for a rainy day, some will shop till they drop and others will pay off their debts, be they credit cards, mortgages, or whatever.
thus each section of the economy is kick started, the banks have cash from the savers, the shops have cash flow and the debt mountain, toxic, or otherwise is relieved.
it may be naive and open to criticism, but it's certainly less than the trillions the banks have got, which appears to have disappreared and to be to no avail.
- M.O'Brien, london.uk, 25/03/2009 17:17
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Gordon keeps bleating on that we have to do "what's necessary to resume growth in the economy". Yes, there is a chance that economy growth can be achieved by massive borrowing and massive spending, but at what long term cost? Do we really want to break this Country's finances for years to come to achieve short term growth? Culpability Brown's boom and bust policies just will not work.
- Dean Hart, London, 25/03/2009 17:15
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This man who has been so spectacularly wrong on everything to do with the economy - Wanting Britian to enter the ERM in the 90"s - Under selling goal - ending boom and bust - the 10p malarchy - failing to prepare for a recession etc etc - This no mark has bankrupted the UK and has a nerve to lecture prudent countries with legitimately elected leaders with their rightful mandates - Angela Merkel must think he's a joke - I wish someone could bring forward a general election and let the people decide what we want - it's amazing that one man can be allowed to cause so much damage to so many people and no one can stop him!
- Des Lewis, london, 25/03/2009 17:12
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No PM deserves to lose office more than Gordon Brown but at least his own reward for failure is a pension pot of £3.5M. He's got a cheek lecturing other countries when he's cocked it up so badly here. Shame on all the folks who voted Labour, how could you? you should be ashamed of yourselves. look at the cabinet- noses in the public trough lining their pockets with our money while we suffer.
- John Fisher, Carlisle, England, 25/03/2009 17:01
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Unfurtantly, and unlike many other G20 mnations, before the crunch our budget deficit was way too big (especially if you include PFI and public sector pensions, which the government does not). This gives us less room to manover and stimulate the economy. King was right.
- Jeremy E, London, 25/03/2009 16:58
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Please keep him for as long as you want to, second thoughts send him home we need him to single handedly help labour lose the next election!
- Wayne, Herts, Uk, 25/03/2009 16:44
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His globe trotting supports his unconvincing off target view and mantra that the cause of problems is 'global'.
Please God no one will be convinced - he is responsible for so much and he is single handedly wrecking this country.
I wouldn't trust Brown with a weeks pocket money let alone the country's economy or global rescue.
- Hb, uk, 25/03/2009 15:08
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To rescue the Economy you need to attack the "Confidence Crisis". No Stamp Duty for 12 Months. 1 year Interest Free for first time buyers - and a £3000 grant for those staying there for 5 years. VAT refund on all home improvements started this year. No VAT on new cars until 2010. And NO MORE money to the Disgraced Bankers who've been conning us all for years. Have you noticed when Banks make a huge profit then it goes to the Shareholders. But when they lose - it was YOUR pension that was at stake?
- Garry, Liverpool UK, 25/03/2009 13:24
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No other PM or President is touring the world, telling countries how to solve the problems inflicted by the 'Credit Crunch' they would appear to have their hands full dealing with their own domestic problems! Bearing in mind our problems run deeper, and, our pockets are shorter than our fellow G20 colleagues, is our PM best qualified to provide best advice on remedying the problem? With his track record, do his peers (particularly on Europe) feel gratitude, or, resentment at the unrequested advice proferred by this self appointed economic guru? Perhaps the PM could also advise us why he acts as if his economic track record over the past decade belongs to somebody else!
- Kevin Sullivan, Roehampton, London., 25/03/2009 12:31
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Surely this is spin by Goldfinger Brown the fool who sold our gold reserves for next to nothing Obama is not silly enough to listen to the person who bankrupted this country now hes trying to ruin the world
- Anon, leicestershire, 25/03/2009 12:19
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Could someone please point out to Obama that Crash is an international laughing stock?
- Marianne, SW France, 25/03/2009 11:10
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Can see Mr Brown is trying to "keep up with the Jones'". Fine for the US with all its wealth but not so easy for the UK.
Mr Brown must stop selling himself at our expense.
- Tony Islander, Herts, 25/03/2009 10:19
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