Economy could begin to recover in April, claims Gordon Brown
The Prime Minister is pinning his political future on agreeing a global response to the crisis with the G20 group of world leaders at a London summit at the start of that month.
He is also considering possible tax cutting measures in the Budget later in April as a way of stimulating the economy and boosting his popularity.
The high-risk strategy adds to the pressure on Mr Brown who is currently 20 points behind in the polls.
He conceded that the London economic summit meeting in April needs to be the start of the global economic recovery. The G20 world leaders, including Barack Obama, were coming to Britain to work towards a “global deal and grand bargain,” Mr Brown said.
Mr Brown said that the world could then “move towards recovery in the next few months” if agreement was reached
The Prime Minister said: “If we can get that action in place and rebuild trust and confidence in the world economy then recovery will be quicker. That is why we are putting a lot of emphasis on the meeting on 2 April. If we can get agreement then that is a major step forwards.
“You can see this is a global problem and it cannot be solved without global action, international co-ordination. That is why I have been pressing so hard that some of the measures we have adopted in Britain we can persuade other countries to adopt.
“That is what is at the crux and how we can move towards recovery in the next few months.”
At a Downing Street press conference he released a blueprint that he hopes will ensure the meeting in London, which begins on 2 April, will be a success. “The Road to Recovery” details the measures needed to drag the world out of recession.
In the document he gives a clear signal that he still believes fiscal stimulus measures are the best way of sparking an economic recovery. Mr Brown has been heavily criticised for introducing a £12 billion VAT cut in the pre budget report in November.
Opposition parties have attacked the move as a waste of money. Yesterday, Nick Clegg, the Liberal Democrat leader, said it was the equivalent of squandering £31million a day.
But Mr Brown has continued to defend the move. The document states that the fiscal stimulus would “feed through to the real economy over the coming months.” And countries will have to consider whether “further action” may be warranted.
Giving a clear hint that countries should continue to look at further tax cutting measures, it added that fiscal policy could provide “timely support for economic activity.”
The Budget will be delivered by Alistair Darling, the Chancellor, two weeks after the G20 ends. The package of measures he announces will be limited by the chronic debt and growth figures that will accompany the statement.
However, it is understood that Mr Brown is keen that further tax cutting measures that will help those suffering in the recession and get people spending again be considered by the Treasury.
He said: “My priority is to help people in this country who are facing problems with their mortgages, problems with their jobs and problems with small business finance.”
Mr Brown also outlined how the world should begin to cut down on the number of tax havens.
He is considering “greater powers for regulators to oversee previously under-regulated sectors and how to ensure consistent regulations in all jurisdictions.”
Meanwhile, the Prime Minister dismissed as “gossip” reports that Cabinet colleagues, including Harriet Harman, had been jockeying for position to succeed him.
He said: “I want to get on with the job I’m doing. My priority is to help people in this country. I believe we are making progress by putting in place all the measures that are necessary.
“None of the rest of the gossip really matters at all.”
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