Page last updated at 17:42 GMT, Friday, 24 October 2008 18:42 UK

We are fighting recession - Brown

Gordon Brown says the government is 'fighting' the recession

Prime Minister Gordon Brown has said the government is fighting recession "every way we know how" but it needs other countries "to work with us".

He spoke as official figures showed the UK economy shrank by 0.5% in the three months to September, twice what some economists were predicting.

Mr Brown rejected Tory claims the downturn was fuelled by his policies.

He said it was a global recession and he urged other countries to follow Britain's lead in tackling it.

He said the UK had led on rescuing the banks and protecting mortgages - and on helping people with bills through the winter fuel payment - and he was working to ensure "other countries are taking the action we are taking to stop this becoming worse".

And he rejected claims Labour's policies over the past decade had made the prospects of a slump worse, stressing it was a global problem which had "started in America".

"It started later in Britain, other countries are in difficulty, but we believe we can help people through these difficult times," he said.

He added: "Every morning I get up and before I go to bed at night, it's got my undivided attention because I want to help people through these difficult times."

Oil prices

He insisted Britain was "better placed" than in the past to weather a downturn because of low interest rates and the action he said the government had taken on the housing market.

He said he "did not like" Opec's decision to cut oil production but claimed the oil price had halved "since we called for it," adding he was determined that would be "passed on" to motorists at the pump and to energy consumers.

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"People have got to see it coming through in their bills and I believe we can push further in the next few weeks to make sure that happens."

But Conservative leader David Cameron said the growth figures released earlier were an indictment of Labour's economic policy over the past decade.

"This is the day that the recession became real. We've had 10 years of being told no more boom and bust, 10 years of a government not putting aside money for a rainy day. Well that rainy day has now come."

Speaking during a visit to a small business in his Witney constituency on Friday, he said short-term changes were needed to support more small firms with their cash flow.

The Conservatives have proposed a six-month VAT holiday for small and medium sized firms and a 1p cut in national insurance for those employing four staff or fewer.

"In the longer term, we need a more balanced economy. Less emphasis on just financial services and housing, more emphasis on technology, on manufacturing, on broadening the base of our economy," he said.

'Boom and bust'

Lib Dem Treasury spokesman Vince Cable told the BBC: "This is a statistical confirmation of what we already knew, which is that the economy is now in recession.

"There are anecdotes from all around the country of people being laid off, factories just not continuing and I fear it is going to get a great deal worse."

He said "radical action" was needed, including a "drastic cut in interest rates" and tax cuts for the low paid.

Chancellor Alistair Darling blamed the fall in UK output on the credit crunch, rising food and energy costs and falling house prices which have forced people to tighten their belts.

He told BBC Radio 4's World at One programme: "It's not surprising that these global shocks are likely to cause recessions in many countries including our own.

"The key is, what do governments do, both at home and also acting together to try and resolve this problem and to see ourselves through it."

'Radical action'

Liberal Democrat leader Nick Clegg said Friday's figures showed the credit crunch was "hitting the real economy and harder and faster than was first feared," and said Mr Brown had consistently ignored warnings that borrowing was out of control.

"This confirmation that we are heading for a recession puts a name to the fear that many people have been feeling for months.

"With millions of people worrying about how they will afford to get through the next six months, we may well be on the edge of a new winter of discontent."



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