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Gordon Brown today braces Britain for potentially its worst recession since the second world war by promising to work with Barack Obama to create a new progressive era across the world. He claims he can build "a global coalition for change" with the US president-elect.
The prime minister said 2008 would be remembered as the year in which "the old era of unbridled free market dogma was finally ushered out". In his traditional new year message, Brown struck a tone of tempered optimism, saying that Britain can this year build a better tomorrow through strategic investments while dealing with the dangerous challenges of today.
He said: "The failure of previous governments in previous global downturns was to succumb to political expediency and to cut back investment across the board, thereby stunting our ability to grow and strangling hope during the upturn. This will not happen on my watch."
Brown said this year would not be easy but his aides pointed to Lord Carter's digital Britain paper last month, big decisions on a third runway at Heathrow airport and plans to create tens of thousands of green jobs as signs that the government will continue with capital investment even though the pre-budget report suggested there will be a capital spending downturn soon. The prime minister's aides are waiting for key figures to be published tomorrow on how well the banks are lending to both small and big business, a key test of whether the recapitalisation package is working.
Brown is looking forward to working with Obama on the US fiscal injection package, a co-ordinated approach to climate change and on 2 April a meeting of the G20 countries in London to discuss setting up a new global financial structure. A co-ordinated reflation is twice as effective as isolated action, he said.
He contrasted his government's promise to help people through the recession with those putting forward "do nothing" policies, notably the Tories: "Today the risk of attempting to do too little is a greater threat than the risk of attempting to do too much. For those worried about jobs we will take every action we can. For those worried about their homes let me tell you that ordinary homeowners should not be the first to pay the price of financial failures. We will help people trying their best to pay their mortgages to stay in their own homes."
But he insisted, in a delphic reference to Britain's wartime spirit, that the British people, and the government, had demonstrated their ability to get through even greater challenges in the past.
"The scale and speed of the global financial crisis was, at times, almost overwhelming. I know that people felt bewildered, confused and sometimes frightened," he said. "That is why the response had to be swift and decisive."
George Osborne, the shadow chancellor, ridiculed the tone of Brown's message, saying he was "living in a fantasy land of his own imagination - not the Britain of 2009. He talks of tomorrow, but ignores the role he played in creating the mess of today."
- Gordon Brown
- Economic policy
- Foreign policy
- Recession
- Credit crunch
- Green politics
- Barack Obama
- United States
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