Page last updated at 20:21 GMT, Wednesday, 25 March 2009

Brown denies split over economy

Gordon Brown and Ban Ki-moon hold a news conference

Gordon Brown has played down reports of rifts with the Bank of England and between the EU and the US over the best way to boost the global economy.

Speaking in the US, the UK prime minister said there was "far more agreement" than had been claimed.

He said leaders were agreed on the need to look at the impact of action already taken and "what should happen next".

He urged April's G20 summit to act to reform the banking system and ensure it could aid the world's poorest nations.

But fresh questions about the UK's debt were raised by the failure of a government bond auction.

The UK Treasury wanted to sell £1.75bn of 40-year bonds, but investors only bid for £1.63bn of the debt - the first failure to get enough buyers since 2002.

Analysts said it might reflect concern over the public finances, but the Treasury said demand remained strong and it would be "wrong to read anything into" it.

Co-operation

Following talks with UN secretary general Ban Ki-moon in New York, Mr Brown said that at the G20 summit in London "doing nothing is no longer an option".

"We will have to take action in London to make sure that the banking system is reformed, to ensure ourselves that our financial institutions can come to the aid of the poorest countries and to make sure that we do what is necessary to ensure that there is strong growth and recovery and particularly jobs in the world economy as a result of the actions that we take," he said.

At a question and answer session hosted by the Wall Street Journal earlier, he said he hoped the summit would see agreements on help for central and eastern Europe and a "continuation of a co-ordinated approach to fiscal and monetary policy" and international agreements on the supervision of the financial system.

G20 LONDON SUMMIT
World leaders will meet next week in London to discuss measures to tackle the downturn. See our in-depth guide to the G20 summit.
The G20 countries are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, the US and the EU.

One agreement he hoped the G20 would reach would be to bring in a system for highlighting publicly any instance of a country putting in place protectionist measures which he said were the "greatest danger we face".

He added: "So I hope at the G20 summit, we will not only agree a pathway forward for world trade agreement but facilitate the expansion of trade in a world where trade is at the moment falling."

"I believe that now, for the first time, global leaders recognise the need to co-operate," Mr Brown said, at a question and answer session at New York University later.

"While in each country people think and see a problem that is their country's problem, they also see that a solution to that problem doesn't just lie within their own country but lies in the international co-operation that is possible."

He said that he expected next month's G20 summit in London to produce "detailed results and positive decisions".

'Avarice'

Asked what had gone wrong with the banks, Mr Brown said there was a question mark over whether everyday standards like valuing responsibility, honesty and rewards for hard work had been applied to the "running of our financial systems".

He highlighted what he described as the "avarice" of the financial system that had been allowed to develop.

A lot of the work at the G20 summit would be about agreeing "common rules by which a global economy can work".

Some progress had already been made on getting tax havens to agree to share tax information on request and there had already been "the biggest fiscal stimulus in history" and big interest rate cuts, he said.

Gordon Brown played down suggestions of a rift with Mervyn King - video courtesy of wsj.com

Asked whether there was a split between Europe's focus on strengthening regulation and the US concentration on a stimulus, he said both were important.

Every country had its own timetable for announcing its fiscal and monetary policies - that was a matter for individual governments, he said.

"Nobody is suggesting that people go to the G20 meeting and put on the table the budget they are going to have for the next year," he said.

Instead he believed they needed to look at, together, what had been done in terms of fiscal stimulus, quantitative easing and interest rates, and their effects, before deciding what should happen next.

"I see a consensus, not a disagreement, on that," he said.

He also played down comments made by Governor of the Bank of England Mervyn King, that the government should be cautious about a further fiscal stimulus, given the high levels of UK debt.

Mr Brown has been pressing the case for wealthy countries to bring forward big fiscal stimulus packages to refloat the economy.

The prime minister said that what was at issue was whether people were prepared to do what was necessary to resume economic growth.

'Lost credibility'

"If you put that question to the governor of the Bank of England he will say, as he said when he signed the G20 communique, that you have to take whatever action is necessary for growth," he said.

Shadow business secretary Ken Clarke said Mr Brown had been one of the "principal architects of the collapse of Anglo Saxon capitalism" yet appeared to want to borrow more money.

He quite obviously thinks a further fiscal stimulus can be afforded by Britain and he seems to be urging everyone else to do the same thing
Ken Clarke
Conservatives

"Gordon Brown is going around the world making these most curious speeches in which he quite obviously thinks a further fiscal stimulus can be afforded by Britain and he seems to be urging everyone else to do the same thing," he said.

The prime minister is touring three continents ahead of next week's G20 summit. He addressed the European Parliament in Strasbourg on Tuesday. The tour will also take him to Brazil and Chile.

US President Barack Obama has said he wants a "robust" and "sustained" fiscal stimulus and has said all countries must share the burden of rescuing the global economy.

"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," he said in a speech in Washington DC.

But Czech Prime Minister Mirek Topolanek, who lost a "no confidence" vote in his own parliament on Tuesday, suggested the US recovery plans were the "way to hell".



Print Sponsor


RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites


FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

BBC navigation

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific