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History > 2009 > UK > Politics > Prime Minister - PM (I)


 

 

Gerald Scarfe

June 7 2009

The Sunday Times

http://www.timesonline.co.uk/tol/comment/article6446488.ece

Prime Minister Gordon Brown

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gordon Brown:

Labour must not bow out,

but fight to win

Prime minister tells delegates at Labour conference
the only consistent thing about the Conservatives
is that they are consistently wrong

 

Tuesday 29 September 2009
17.11 BST
Guardian.co.uk
Deborah Summers, politics editor
This article was first published
on guardian.co.uk at 17.11 BST
on Tuesday 29 September 2009.
It was last updated at 17.26 BST
on Tuesday 29 September 2009.

 

Gordon Brown today vowed to fight and win the next general election as he unveiled a blueprint for the Labour manifesto designed to win back anxious middle Britain voters.

In a determined 59-minute speech to the party's autumn conference in Brighton, the prime minister said the Conservatives had faced the "economic call of the century" and had called it wrong.

And he urged Labour activists to "fight, not bow out, fight to win".

With a general election less than nine months away, Brown outlined the party's priorities on issues such as antisocial behaviour, jobs, healthcare, childcare, the economy, and parliamentary reform.

In a glimpse at the choices Labour will seek to offer voters, Brown pledged to:

• Provide 250,000 free childcare places for two-year-olds.

• Delay the introduction of compulsory ID cards for British citizens.

• Provide a network of supervised homes for 16- and 17-year-old parents.

• Create up to 10,000 green job placements.

• Protect the schools budget.

• Hold a referendum on the alternative vote electoral system after the election.

• Remove hereditary peers in the House of Lords "once and for all", in the next parliament.

• Give constituents the right to remove corrupt MPs.

• Increase the role of post offices in providing financial services.

"It was only a year ago that the world was looking over a precipice and Britain was in danger," Brown said.

"I knew that unless I acted decisively and immediately, the recession could descend into a great depression with millions of people's jobs and homes and savings at risk … And times of great challenge mean choices of great consequence.

"Only one party with pretensions to government made the wrong choice: the Conservative party of Britain," Brown told delegates.

"They made the wrong choice on Northern Rock, the wrong choice on jobs and spending, the wrong choice on mortgage support, the wrong choice on working with Europe.

Gordon and Sarah Brown before the PM's speech today. Photograph: Stefan Rousseau/PA
"The only thing about their policy that is consistent is that they are consistently wrong. The opposition might think the test of a party is the quality of its marketing but I say the test for a government is the quality of its judgment.

"The Conservative party were faced with the economic call of the century and they called it wrong. And I say a party that makes the wrong choices on the most critical decisions it would have faced in government, should not be given the chance to be in government."

For the second year running, Sarah Brown gave a heartfelt introduction to her "hero" husband on the conference stage.

"I know a lot about my husband; we've been married for nine years now. We've had some great times and we will be together for all times," she said.

"Because we've been together for so long, I know he's not a saint – he's messy, he's noisy – but I know he goes to bed every night and he gets up every morning thinking about the things that matter."

Sarah Brown said she had always been struck by how someone so intense would make time for family, friends and everyone who knows him.

"That's why I love him as much as I do. That's what makes him the man for Britain too."

Admitting her husband had a "tough job", she said she wouldn't want it for the world, but added: "Every day I'm glad he's the one up there doing the job."

In his speech, the prime minister vowed to help create new opportunities for young people. He announced a new partnership with the Federation of Small Businesses to encourage ambition and enterprise and pledged a joint effort with the Eden Project, the environmental exhibition centre in Cornwall, and May Day Network, the business anti-climate change group, to "create the biggest group of green work placements we have ever done – up to 10,000 green jobs placements".

Conceding once again that public spending would have to be reined in, Brown said the government would raise tax "at the very top, cut costs … and make savings where we know we can" to protect frontline services.

Brown pledged more tough action on antisocial behaviour with local authorities given the power to ban 24-hour drinking.

On immigration, the prime minister said Britain's point-based system would be tightened to welcome only those who had the skills the country needed.

Brown also reiterated his pledge not to introduce compulsory ID cards for British citizens in the next parliament.

Delegates cheered as he praised the work of the British armed forces, claiming they "truly are the finest in the world" and he promised to ensure they would always have all the equipment they needed.

Britain would work with Barack Obama to ensure peace and stability in Afghanistan and the Middle East, he said.

Brown heaped praise on the work of the National Health Service and said Labour's general election manifesto would promise social care for all to ensure dignity and support in old age.

On MPs' expenses, the prime minister admitted that, although the vast majority of Labour MPs were in parliament to serve the public, "there are some who let our country down".

"Just as I have said that the market needs morals I also say that politics needs morals too," he said.

"So where there is proven financial corruption by an MP and in cases where wrongdoing has been demonstrated but parliament fails to act we will give constituents the right to recall their member of parliament."

In a move that was immediately welcomed by business groups and trade unions, which have been campaigning for a People's Bank to help secure the future of the UK's 12,000 post offices, Brown announced a bigger role for post offices in providing financial services.

In an attempt to rally Labour activists in what will be his last conference speech before the next general election – which must be held before 3 June next year – Brown warned that a Conservative government would put the country's prosperity at risk.

"It's the difference between Conservatives who embrace pessimism and austerity and progressives like Labour who embrace prosperity and hope," he said.

"Since 1998, Labour has given this country back its future. And we are not done yet.

"We love this country and we have shown over the years that if you aim high you can lift not just yourself but your country. There is nothing in life which is inevitable – it's about change you can choose."

Union leaders warmly welcomed the speech, saying he had drawn some "clear red lines" between Labour and the Conservatives.

Tony Woodley, the joint leader of Unite, said: "The prime minister spoke of the values that are true to Labour."

Dave Prentis, the leader of Unison, said: "This was fighting talk – tough talk with real substance. We particularly welcomed the announcement on care for the elderly and making the bankers pay back the money."

But David Frost, the director general of the British Chambers of Commerce, warned: "As we emerge from the worst recession since the second world war, businesses must be given the freedom to create much-needed wealth and jobs. Business must not be caught up in the rush to regulate the excesses of the banks."

    Gordon Brown: Labour must not bow out, but fight to win, G, 29.9.2009, http://www.guardian.co.uk/politics/2009/sep/29/gordon-brown-labour-conference-speech

 

 

 

 

 

Gordon Brown's role in release of Megrahi revealed

PM did not want man convicted of Lockerbie bomb to die in jail, Libya told

 

Wednesday 2 September 2009
The Guardian
Severin Carrell and Nicholas Watt
This article was first published on guardian.co.uk at 01.56 BST on Wednesday 2 September 2009.
It appeared in the Guardian on Wednesday 2 September 2009 on p1 of the Top stories section.
It was last updated at 02.10 BST on Wednesday 2 September 2009.

 

Gordon Brown and David Miliband were last night drawn directly into the furore over the release of the man convicted of the Lockerbie bombing when it emerged that Britain told Tripoli that the prime minister and foreign secretary did not want to see him die in prison.

In a major setback for Downing Street, which has insisted the release was entirely a matter for Edinburgh, it emerged that a Foreign Office minister intervened last February to make clear to Libya that Brown and Miliband hoped Abdelbaset al-Megrahi would not "pass away" in prison.

Amid warnings from Tripoli that allowing Megrahi to die in prison would amount to a "death sentence", Bill Rammell, then a Foreign Office minister, passed the message to Abdulati Alobidi, Libya's Europe minister, during a meeting in Tripoli.

His intervention was revealed yesterday in a note of a meeting which took place in Glasgow in March between Scottish officials and Alobidi. The note disclosed that the Libyan minister had said: "Mr Rammell had stated that neither the prime minister nor the foreign secretary would want Mr Megrahi to pass away in prison but the decision on transfer lies in the hands of Scottish ministers."

The disclosure that the prime minister had expressed a view on the release of Megrahi, which emerged when the British and Scottish governments released a series of documents relating to the release of the convicted Lockerbie bomber, will be a severe blow to Brown. The prime minister has insisted that the British government had no involvement in the release of Megrahi, who was sent home on compassionate grounds by the Scottish justice secretary, Kenny MacAskill, last month.

In a sign of ministerial unease, it took Rammell almost two hours yesterday afternoon to respond to the publication of his reported remarks. Rammell, now a defence minister, made no attempt to deny his intervention when he released a brief statement which reiterated the British position that Megrahi's status was a matter for the Scottish authorities.

"Neither the Libyans nor the Scottish executive were left in any doubt throughout this entire process that this was a decision for the Scottish executive over which the UK government sought no influence," Rammell said. "I made it clear in all my dealings with the Libyans that the decision around Megrahi was exclusively one for the Scottish executive."

Later Rammell told the BBC he had conveyed Brown's feelings to the Libyans: "I did say that. But we need to put it in context. I was making it emphatically clear that this was a decision for Scottish ministers."

The documents also show Libya promised Megrahi would receive a low key homecoming. Scottish government notes of a meeting with Alobidi said: "Mr Alobidi said he would like to take this opportunity to assure the Scottish government that if Mr al-Megrahi were to be transferred to Libya that it would be done quietly and peacefully and away from the glare of the media. He noted that he understood such a transfer would need to be treated sensitively."

David Cameron last night seized on Rammell's intervention to demand a public inquiry into the release of Megrahi, claiming that Brown now stands accused of double dealing. He said: "For weeks [Brown] has been refusing to say publicly what he wanted to happen to Megrahi. Yet we learn, apparently, privately the message was being given to the Libyans that he should be released.

"I don't think we can now trust the government to get to the bottom of this so I think the time has come for an independent inquiry led by a former permanent secretary or former judge to find out what more papers need to be released so we can see what the British government was doing in our name."

The release of such a sensitive document by the Scottish government was designed to turn the spotlight on Brown as the SNP deals with the greatest crisis since it took power in Edinburgh in 2007.

The SNP is expected to lose a vote today on the Megrahi release in the Scottish parliament as Labour, the Tories and Liberal Democrats – emboldened by the US opposition to the release – mount their most serious challenge to the Scottish first minister, Alex Salmond. Angus Robertson, the SNP leader at Westminster, said: "With the report of Bill Rammell's claim that neither Gordon Brown nor David Miliband wanted Megrahi to die in a Scottish jail, it seems the UK government were bending over backwards to show Libya they had no objection to Megrahi's release – which drives a coach and horses through Labour's position in Scotland."

The documents show Libya placed intense pressure on London and Edinburgh to release Megrahi. At one point Alobidi warned: "Death in custody would be akin to a death sentence without the benefit of the court and that 'they want a way out'."

No comment was forthcoming on the publication of the exchanges between the British and Scottish governments, a further sign Libya wants to draw a line under the controversy. Megrahi's health, meanwhile, is said to be deteriorating fast. The head of Libya's state information agency, Majid al-Dursi, described him as "very sick".

The papers released yesterday reveal that Scottish ministers were secretly told by the Libyans in January – far earlier than previously thought – that Megrahi might drop his appeal, which threatened to reveal damaging information about the police investigation into the bombing.

Megrahi dropped his appeal two days before MacAskill announced he would be freed, claiming he believed it would assist his release – a disclosure which has raised suspicions of a deal between Scottish and Libyan ministers. Those claims have been repeatedly denied by Scottish ministers.

    Gordon Brown's role in release of Megrahi revealed, G, 1.9.2009, http://www.guardian.co.uk/world/2009/sep/01/gordon-brown-lockerbie-megrahi-libya

 

 

 

 

 

PM signals end to Taliban offensive



Monday, 27 July 2009
Press Association
The Independent

 

Gordon Brown today signalled the end of the bloody offensive to drive back the Taliban in Afghanistan.

 

The Prime Minister insisted that Operation Panther's Claw had not been "in vain", despite the deaths of 20 British troops over the past month.


"The efforts of our troops in Helmand have been nothing short of heroic," Mr Brown told the Evening Standard. "There has been a tragic human cost. But this has not been in vain."

 

Mr Brown said it was now time to "commemorate" the British troops who have died in Afghanistan.

 

Twenty British personnel have been killed this month alone in Afghanistan - with 189 having died since the start of operations eight years ago.


During a constituency visit in Fife today, the Prime Minister said it has been "one of the most difficult summers" since troops went into Afghanistan.


He said: "Now that Operation Panther's Claw has shown that it can bring success and the first phase of that operation is over, it's time to commemorate all those soldiers who have given their lives and to thank all our British forces for the determination and professionalism and courage that they've shown.


"What we have actually done is make land secure for about 100,000 people.


"What we've done is push back the Taliban - and what we've done also is to start to break that chain of terror that links the mountains of Afghanistan and Pakistan to the streets of Britain.


"And I'm very proud of what our forces have achieved over the last few weeks - indeed for all the time they've been in Afghanistan."


He also echoed Foreign Secretary David Miliband's call earlier today for talks with more moderate Taliban elements.


Mr Brown said: "Our strategy has always been to complement the military action that we've got to take to clear the Taliban, to threaten al Qaida in its bases - while at the same time we put in more money to build the Afghan forces, the troops, the police.


"We build up the institutions in society in Afghanistan so there's strong local government.


"We help give people a stake in the future of Afghanistan and at the same time we try to bring over those elements that can now work with the democratic process.


"So, it's part of a strategy that involves Pakistan and Afghanistan as well.


"It's a civilian and military strategy and that's the way we will succeed in the long run - by letting the Afghan people take more control of their own affairs by building up their army and building up their police."

 

The first stage of the operation in the troubled southern province drew to a close as senior ministers urged the stepping up of efforts to engage moderate Taliban elements.

 

Foreign Secretary David Miliband said the insurgency was "divided", with many of those fighting against international forces doing so for "pragmatic" rather than ideological reasons.


International Development Secretary Douglas Alexander admitted there were concerns about holding talks while fierce combat was taking place.


"It is a difficult message for politicians to talk about the issues of reconciliation and reintegration when British troops are fighting the Taliban," he told the BBC Radio 4 Today programme.


"But I have confidence in the good judgment of the British people. I think people recognise from the experience of places like Northern Ireland that it is necessary to put military pressure on the Taliban while at the same time holding out the prospect that there can be a political process that can follow, whereby those that are willing to renunciate (sic) violence can follow a different path."


Downing Street stressed that the Government had not changed its position, and would only deal with Taliban elements who were willing to "renounce violence".

    PM signals end to Taliban offensive, I, 27.7.2009, http://www.independent.co.uk/news/world/asia/pm-signals-end-to-taliban-offensive-1762287.html

 

 

 

 

 

Gordon Brown: The flawed colossus

In his pursuit of power, Gordon Brown has mistaken arrogance for forcefulness, riding roughshod over his opponents. And even as Labour collapses, his defiant 'I will not walk away’ has undertones of King Lear, says Anne McElvoy.

 

Published: 9:00AM BST 07 Jun 2009
The Daily Telegraph

 

The moment of truth came on Thursday night, when a small but precisely aimed bombshell hit No 10 Downing Street. James Purnell, the charmed Blairite, entrusted by Gordon Brown with one of his central objectives, of welfare reform, was leaving Cabinet, because he did not think Mr Brown could improve Labour’s poor standing. For the sake of the party “which we both love”, he urged him to stand aside.

Mr Brown’s fury was brief when the call came, his response instant: “I am not going to let them get me out like this.”

Thus began “Operation Save Gordon”, a frantic night of shoring up allegiances and flushing out suspected doubters, culminating in a shotgun reshuffle to salvage his flailing authority.

It has been the climax of a brewing drama around the leadership of a man who both attracts and magnifies misfortunes, and keeps battling against them with stubborn vigour.

Now he resembles a political King Lear, a once towering figure on the blighted Labour landscape, the storms of the expenses crisis and economic turbulence howling around him, a dissolving retinue and senior figures coldly naming their terms for continuing to stay with him.

Mr Brown sometimes makes changes, but he never really alters. His strengths and flaws are too firmly set. He says so himself with the aggrandising references to “my inner core”, those Scottish “values” and the ever-present “moral compass”.

This is the kind of leader he wants to be: not flash, just Gordon, as the slogan for the abortive election campaign of two years ago was planned to proclaim. He might smile more (though not much right now) or seek to sound more relaxed, with varying degrees of success. “Did you ever hear anyone sound as strained being relaxed as Gordon?” asks one former aide.

Still, there is something distinct about him: an aura of Labour grandeur which harks back to the immediate post-war era of titanic characters and mighty egos seeking to build a new Jerusalem in postwar Britain.

Steeped in the party’s history in a way that his rival Tony Blair never was, Gordon Brown believes in the stories of great men, and a couple of approved women – Aung San Suu Kyi is a current favourite – shaping the destiny of their countries. From boyhood, he set out to be one of them: dreaming of running Labour in his teens, in the way that most of his Kirkaldy schoolmates dreamt of playing football for Scotland or topping the charts.

One reason that Mr Brown’s fall fascinates even those who dislike him intensely is that he has a quality of flawed grandeur which Shakespeare would have recognised. If he were a less serious figure, it would all matter less, this ungainly struggle to ward off decline. It’s also the unwinding of a personal quest, which begins before New Labour: a feisty new MP setting his mark on the Commons under Thatcher, fighting over privatisations and condemning her stringent approach to social security benefits. Tempora mutantur: he’s now doing both.

“Blair was mammothly dazzled by Brown’s power,” recalls Lord Falconer, Blair’s close friend, of their early

co-operation. “I don’t think he thought he’d be leader of the party. Brown was the obvious man.”

Being the “obvious man” marked out his career – but also increased the bitterness when the ascendancy of Blair made him wait too long for the prize. “He got it too late,” adds one Cabinet wife close to him. “That’s something he can’t change.”

It’s also the reason he hangs on so grimly to the job: something he has aspired to in Parliament for two-and-a-half decades is not, to his mind, to be snatched away in a rictus of panic or a back-stab from some slick young thing in sideburns.

But the air of failure and dissolution now hangs heavy over Mr Brown’s leadership. When Peter Mandelson said of Purnell’s departure, that he just “didn’t like the face of the man at the top”, it was rather too telling to be an excuse: Mr Brown, even freed from the dominance of his old frenemy Tony, has never won the hearts of the electorate or colleagues outside his own band of loyalists.

It’s the running theme in criticism of colleagues from Alastair Campbell’s “psychological flaws” observation to Charles Clarke’s broadside to me two years ago about his “absolutely stupid behaviour” and need to address his character deficiencies.

So many conflicts go back to Mr Brown’s personal behaviour. Lord Turnbull, who worked at the Treasury with him as Permanent Secretary, broke with the Whitehall omerta to accuse him of “Stalinist ruthlessness” and treating ministers “with contempt”.

In his pursuit of absolute power, he has mistaken arrogance for forcefulness: riding roughshod over ministers who opposed him, drawing dividing lines in his own party as well as with the Opposition. “You were just with him or against him and the decision was final,” says one (sacked) minister.

There has been, although he would hate the thought, a rich vein of comedy here, too. Everyone has their favourite Gordon joke. Mine is the one about him being told by his staff that he needed to sound more personal when calling backbenchers to elicit their support, and then saying to one: “How’s it going in the constituency, and how are your two children, aged seven and nine?” Apocryphal, Brownites will surely object, but the grain of truth is unmistakable: Mr Brown is myopic about the private worlds of others.

Derek Draper, who worked for him in the final haul of Opposition in the mid- Nineties, told me of his boss getting ready for an important dinner, and raging about some undone task in a volley of swear words – while wandering about in shirt and underpants because he couldn’t find his trousers, and had forgotten that he was looking for them at all.

Stories of “bad Gordon” – the rages, the feuds, the obsessions, would fill a book – and already have. But he also retains so many of the great gifts: a strong intellect, astounding memory and interest in the “big picture”.

Hence the abiding interest in global poverty and his conversion to the cause of climate change – and an intense, even impolite frustration with those who don’t “get” the importance of the weft and weave of global affairs and their ultimate impact on our lives.

He’s a more interesting conversationalist than many would credit, if not the greatest listener: you have to fight jolly hard for airtime. He can range across American politics (encyclopedic on any major Democrat figure and the Great Depression), sport and philosophy and has a prodigious memory for the past struggles and stories of his own party.

Talking to him once about the miners’ strike, I was struck at the way the characters of that era were still so alive in his mind and that he seemed steeped in the continuities of Labour, in a way that few politicians today carry much awareness of a time before the very recent past.

What kind of Britain did he set out to create? A more equal one, certainly, hence his lasting emphasis on redistribution. But he has made limited gains here, in part because closing the equality gap is much harder than those who try to do so imagine – the pull of differential progress and the uneven rewards of advanced capitalism are against them. Too often, he fails to match his goals of greater opportunity and social improvement with innovative enough means and is slow to accept new thinking – the major frustration of New Labour modernisers.

The Laura Spence case, in which he singled out the admissions saga of one student to “prove” Oxford discriminated against applicants from ordinary backgrounds, was a low point. It’s an intervention he still defends, though most thinking ministers shudder at the memory of this mini class-war.

His personal story, from serious son of the manse to precociously brilliant student, even after a debilitating injury leaving him blind in one eye, is well known. But he remains a figure people find difficult to understand.

He has had his share of terrible misfortune, with the death of his first child, Jennifer, days after her birth.

The chronic illness of his second son, Fraser, seemed like an unnecessarily cruel blow of fate, though he and Sarah cope with equanimity with the condition and its demands and he is determined not to define the child by his illness.

He once gave me a very fond, Gordonish description of watching one of his babies at play and noticing that they distinguished between square and round objects: an intriguing observation on infant development, but it’s not exactly common-or- garden paternal chat. As a young man, he was devastatingly handsome: the brooding intensity has sex appeal and he made some use of it, with a string of girlfriends, before Sarah Macaulay finally brought him to the altar: a PR wife for a politician who desperately needed his image burnishing. “She was manna from heaven really,” says one of his court.

No one doubts the strength of the relationship. It’s an asset Mrs Brown shrewdly played on when she introduced “My husband, your Prime Minister” in order to rebind the already fraying ties of the party to its leader at last year’s Labour conference.

But even Mrs Brown, with her widening network of causes and international contacts, ranging from Naomi Campbell to Michelle Obama and Paris Hilton, seems to be quietly preparing for a life after No 10.

Hardly anyone, except perhaps Brown himself, thinks the next election is winnable, but he does believe he can avert a wipe-out, because his faith in his own judgment of an economic revival is unshaken – and he is convinced that he can burst the Cameron bubble, though that also goes with underestimating the force of the New Tories.

Blairites used to say Brown would “hate being Prime Minister”, with its constant demands, lack of thinking time and endless procession of visitors. How wrong can you be? He even warms nowadays to the flummery of state visits like the glitzy Sarkozy fest and his piece de resistance, the G20 meeting.

A good part of his downfall is written in the unforgiving stars of the political and economic cycle. But he does bear heavy responsibility for failing to prepare for the downturn and believing his own propaganda of “unprecedented” British growth. Self-criticism is not his thing. Other squanderings of capital have been foolish misjudgments: one ministerial critic notes that for a man so steeped in politics, he can be “a bloody awful politician”. So the 10p tax row, intended to reposition him as a champion of middle-class earners, ended up affecting millions on low pay and causing a revolt.

He gambled, too, on the 42-day terror detention Bill, without probably even believing it was necessary, in an attempt to be the “Security Prime Minister”. That backfired. The expenses backlash is worse for him, not only because he is ultimately in charge, but because he had ample opportunity to be more serious about the matter and thought it beneath his interest.

Like the bullish former Tory leader Michael Howard, a more similar character to Mr Brown than either would care to think, he makes an unpopular populist, because it is a role that is alien to him and he cannot really master. The YouTube pratfall was the performance of a man who did not really enjoy or feel at home with what he was doing.

On Friday, at his “I’m still here” press conference, a little humility at the dreadful election result soon gave way to irritation with journalists’ questions he did not like. The defiant “I will not waver, I will not walk away” headline was intended to invoke command, but for those watching, it also had an undertone of Lear’s “I am tied to the stake and must stand the course”.

He really does believe that he has vanquished his challengers, who are divided and scattered, though the cost to his reputation and that of his Government is deep and maybe impossible to redress.

Shortly afterwards, however, a leading member of the Cameron team called and noted that he had found the fightback “Gordon’s best moment”: “He just has this solid, ox-like thing about him.You have to admire it.”

“Is this the promised end?” cries Lear in his final torment. It’s a feeling Mr Brown must privately share. So much promise, so close to a bitter end and fighting a battle he is doomed to lose: Labour’s flawed Colossus.


Anne McElvoy also writes for the 'London Evening Standard’

    Gordon Brown: The flawed colossus, DTel, 7.6.2009, http://www.telegraph.co.uk/news/newstopics/politics/gordon-brown/5464235/Gordon-Brown-The-flawed-colossus.html

 

 

 

 

 

We fight on, insists Gordon Brown after day of political blows

 

June 6, 2009
From The Times
Philip Webster, Political Editor

 

Gordon Brown survived to fight another day as he used a Cabinet reshuffle yesterday to bolster his battered authority while waiting for the full scale of Labour’s election losses to sink in.

The Prime Minister was left vulnerable after suffering another savage attack from a departing minister and then failing to install his ally Ed Balls as Chancellor.

He shored up his power base by making Lord Mandelson, his former enemy whom he brought back less than a year ago, his deputy in all but name, giving him the official title of First Secretary of State. Other Blairites, Tessa Jowell and Lord Adonis, were brought into the Cabinet. Mr Brown switched Alan Johnson, his potential rival, to the Home Office, a traditional graveyard for ministers.

But Lord Mandelson appeared to acknowledge the fragility of Mr Brown’s position when he warned Labour MPs against continuing their attempt to unseat him. In an interview with The Times, he told the plotters that, if Mr Brown went, there would have to be a Labour leadership election, swiftly followed by a general election, which most of them fear.

He said: “Another leader couldn’t simply mean another coronation; you would have to have a leadership contest. A picture would be presented to the country that is entirely selfindulgent. A general election shortly afterwards would be unavoidable too.”

As Labour suffered its worst local election results and awaited the declaration of the European poll tomorrow, Mr Brown and his allies braced themselves for a meeting of Labour MPs on Monday. There they will discover whether the threat posed to the leadership by a group of disgruntled MPs, has been seen off.

Two more Cabinet ministers resigned, Geoff Hoon and John Hutton, the latter having warned Mr Brown weeks ago of his intentions. Neither criticised Mr Brown as James Purnell had the previous evening, although Mr Hutton is known to take a pessimistic view of Labour’s prospects. In a surprise move, Mr Brown brought Glenys Kinnock, wife of the former Labour leader, into the Cabinet as Europe Minister. This was after Caroline Flint, who 24 hours earlier had pledged loyalty to Mr Brown, walked out, accusing him of treating her and other women ministers as “little more than female window dressing”.

Alistair Darling, who had been expected to move from the Treasury, kept his job. Mr Brown, backed by Lord Mandelson, had been planning to put Mr Balls into that post. But in the febrile situation created by Mr Purnell’s resignation, Mr Brown decided he could not force out a Chancellor who wanted to stay. In a press conference after his reshuffle, Mr Brown declared: “I will not waver, I will not walk away, I will get on with the job.”

He was pressed into denying that he had wanted to sack Mr Darling. He insisted: “If I didn’t think I was the right person leading the right team . . . I would not be standing here.”

A tired and nervous Mr Brown admitted Labour had plunged to “a painful defeat” in the elections and said that the current political crisis, fuelled by the Westminster expenses scandal, “is a test of everyone’s nerve – mine, the Government’s the country’s”.

Mr Johnson admitted he had not given up hope of replacing Mr Brown by declaring he was backing the Prime Minister “to the hilt” but he would “never say never” to running for No 10. Ominously for Mr Brown, more MPs called for him to quit. The former minister Meg Munn said: “I am very sad to say that I have come to the view that I think we should have a different leader now.”

In the local elections Labour lost control of its four remaining county councils in England – Derbyshire, Lancashire, Staffordshire and Nottinghamshire. The Prime Minister also now faces an unwelcome by-election test after Ian Gibson, the Norwich North MP caught up in the expenses scandal, announced he was standing down as an MP.

    We fight on, insists Gordon Brown after day of political blows, 6.5.2009, Ts, http://www.timesonline.co.uk/tol/news/politics/article6441212.ece

 

 

 

 

 

Gordon Brown's new cabinet

The list released by Downing Street, showing Peter Mandelson in the newly created role of first secretary of state

 

Friday 5 June 2009
17.39 BST
Staff and agencies
Guardian.co.uk
This article was first published on guardian.co.uk at 17.39 BST on Friday 5 June 2009.
It was last updated at 17.49 BST on Friday 5 June 2009

 

Prime minister: Gordon Brown


Leader of the Commons: Harriet Harman


First secretary of state: Lord Mandelson


Chancellor of the exchequer: Alistair Darling


Foreign secretary: David Miliband


Justice secretary: Jack Straw


Home secretary: Alan Johnson


Environment, food and rural affairs secretary: Hilary Benn


International development secretary: Douglas Alexander


Communities and local government secretary: John Denham


Children, schools and families secretary: Ed Balls


Energy and climate change secretary: Ed Miliband


Health secretary: Andy Burnham


Northern Ireland secretary: Shaun Woodward


Leader of the Lords: Lord Royall of Blaisdon


Minister for the Cabinet Office, the Olympics and paymaster general: Tessa Jowell


Scotland secretary: Jim Murphy


Work and pensions secretary: Yvette Cooper


Chief secretary to the Treasury: Liam Byrne


Wales secretary: Peter Hain


Defence secretary: Bob Ainsworth


Transport secretary: Lord Adonis


Culture, media and sport secretary: Ben Bradshaw

    Gordon Brown's new cabinet, G, 5.6.2009, http://www.guardian.co.uk/politics/2009/jun/05/gordon-brown-new-cabinet-list

 

 

 

 

 

Brown: I should have done more to prevent bank crisis

PM accepts 'full responsibility' and declares pure free-market era is over

 

Tuesday 17 March 2009
The Guardian
Patrick Wintour and Nicholas Watt
This article was first published on guardian.co.uk at 00.01 GMT on Tuesday 17 March 2009.
It appeared in the Guardian on Tuesday 17 March 2009 on p1 of the Top stories section.
It was last updated at 02.53 GMT on Tuesday 17 March 2009.

 

Gordon Brown attempts to launch a political fightback today by declaring that he takes "full responsibility" for his role in the banking failures that led to the global recession, and claims that the downturn marks the end of the era of laissez-faire government.

In an interview with the Guardian, the prime minister concedes that in retrospect he wishes he had mounted a popular campaign 10 years ago to demand more responsible regulation of the world's financial markets. He attempts to draw a line under calls for him to make an apology by admitting that the national system of regulation he helped establish in 1997 could not keep pace with the massive global financial flows.

In some of his most extensive comments on his role in the recession, Brown said: "I take full responsibility for all my actions, but I think we're dealing with a bigger problem that is global in nature, as well as national. Perhaps 10 years ago after the Asian crisis when other countries thought these problems would go away, we should have been tougher ... keeping and forcing these issues on to the agenda like we did on debt relief and other issues of international policy."

Brown spoke at the start of a major Guardian series on Labour's future. David Cameron, the Conservative leader, has exploited the prime minister's reluctance to make an apology, a tactic which has helped give him a double-digit lead in the polls.

Brown's remarks will, he hopes, give the party a launchpad to retaliate, insisting that it "is essential for the sake of the country" that Labour wins a fourth term at the next general election, likely to be held next year.

He argues that "only progressive, centre-left governments can address the problems of the global change".

Brown also claims that "the 40-year-old prevalent orthodoxy known as the Washington consensus in favour of free markets has come to an end", but signals a refusal to return to Labour's comfort zone by saying there will be no return to "big government", or any let up in public service reform.

"Laissez-faire has had its day. People on the centre-left and the progressive agenda should be confident enough to say that the old idea that the markets were efficient and could work things out by themselves are gone", he says.

The Guardian has learned that ministers have separately conceded that the government is now unlikely to go ahead with a planned spending review this summer, partly because the economic outlook is so unstable that it is hard to make meaningful three-year spending forecasts department by department in Whitehall.

During the interview, Brown:

• Refuses to rule out a further British economic stimulus in the April budget. He promises extra help for hard-pressed savers and says ministers are looking at offloading further public assets in the budget in a bid to balance the books.

• Defends reforms to the part privatisation of the Royal Mail, saying it is right to find an international investor to help with new international investment.

• Insists the G20 summit in London on 2 April will determine whether the world collapses into protectionism. This, he says, would be "the road to ruin", parallel to the failed London economic conference in 1933 that made recession a fact of life for the rest of the decade.

• Says the summit will agree new ground rules to control not just the structure of executive pay, but their absolute levels. He also claims the summit will also signal "the beginning of the end of the offshore tax havens and banking secrecy".

• Seeks to dispel notions of a split between the US and mainland Europe on whether to back a specific co-ordinated further economic stimulus linked to each nation's GDP, saying: "It is not about numbers, but about commitments by each continent to coordinate their action."

The prime minister also argued that the world recession was changing the public's expectations of business values, and they no longer believe a successful economy has to be based on high levels of risk.

"Most people want business to have the same values as they practise in their everyday life. People would rather reward hard work rather than risk-taking. They want to support enterprise and not excess. They want to support people that take responsibility and not run away from it".

Giving his fullest defence of his role in the recession, and his refusal to offer an outright apology, he said: "I take full responsibility for all my actions."

The prime minister said: "We created a system in 1997 which was unified regulation. Before 1997 it was virtually self-regulation. We created a statutory system, but around the world we were finding that we had a global set of financial flows and you needed global supervision."

He added there had been a wider general intellectual failure to understand the dangers of these sophisticated markets.

"The general view of financial practitioners was that the more ownership of products was diversified, the more you limited the danger of risk falling on one institution.

"But actually because of the entangled nature of the financial institutions, what was designed to spread risk actually spread contagion."

He defended his role in bailing out the banks, saying he had saved them from collapse and claimed his government was the first in the world to impose quantitative targets for lending amounting to £50bn this year to banks in which the government holds shares.

    Brown: I should have done more to prevent bank crisis, 17.3.2009, 17.3.2009, http://www.guardian.co.uk/politics/2009/mar/17/gordon-brown-recession-banking-regulation

 

 

 

 

 

Gordon Brown vows to bring Northern Ireland murderers to justice

Prime minister says the people of Ulster are determined to 'stand up to the evil of criminal violence'

 

Wednesday 11 March 2009
12.44 GMT
Guardian.co.uk
Deborah Summers, politics editor
This article was first published on guardian.co.uk at 12.44 GMT on Wednesday 11 March 2009.
It was last updated at 14.21 GMT on Wednesday 11 March 2009.

 

Gordon Brown today vowed that no stone would be left unturned in tracking down the murderers of two soldiers and a policeman in Northern Ireland.

The prime minister said he had personally spoken to Sir Hugh Orde, the chief constable of the Police Service of Northern Ireland, to ensure he had all resources necessary to "bring criminal murderers to justice" and combat the terrorist threat.

As he joined with the Tory leader, David Cameron, to condemn the killings at prime minister's question time, Brown said: "Out of tragedy we are seeing a unity which shows the determination that while a few murderers may try to disrupt the process, the whole of the people of Northern Ireland want not only to see justice done but to send a message that the political process is here to stay and is working."

Brown said today's peace marches in Northern Ireland showed the "defiance and determination" of people to "stand up to the evil of criminal violence".

Both leaders also criticised the disruption of a homecoming parade of British soldiers by anti-war protesters in Luton yesterday.

"There is a right to freedom of speech but there is not a right to disruption and to public disorder," Brown said.

Cameron, returning to PMQs two weeks after the death of his son Ivan, condemned the "callous killers" who shot the two soldiers on Saturday and the policeman in Craigavon.

Insisting Northern Ireland was not "staring into the abyss", he said there ought to be a "measured" response to the killings.

The most important thing was that everyone worked with the police to ensure the killers could be found and convicted, Cameron said.

    Gordon Brown vows to bring Northern Ireland murderers to justice, G, 11.3.2009, http://www.guardian.co.uk/politics/2009/mar/11/gordon-brown-northern-ireland-murders

 

 

 

 

 

Brown holds security talks in Northern Ireland

PM arrives at Massereene barracks
to meet province's most senior army officer for security talks about terror resurgence

 

Monday 9 March 2009 09.18 GMT
Owen Bowcott
Guardian.co.uk
This article was first published on guardian.co.uk at 09.18 GMT on Monday 9 March 2009.
It was last updated at 12.09 GMT on Monday 9 March 2009.

 

The prime minister, Gordon Brown, arrived at Massereene barracks in Northern Ireland early this morning to hold talks about military security with the province's most senior army officer.

Brown flew in to Aldegrove airport outside Belfast and was driven to the 38 Engineers Regiment base, the scene of the attack at the weekend claimed by the Real IRA.

Flanked by motorcycle outriders, a convoy of armoured black Range Rovers carrying the prime minister arrived just before 8.20am.

They drove through the entrance where the two young soldiers were gunned down on Saturday evening as they came out to collect pizzas.

The convoy passed the accumulating pile of flowers left by wellwishers just outside the entrance to the barracks.

Brown was joined by the Northern Ireland secretary, Shaun Woodward, and the province's security minister, Paul Goggins, for the meeting with Brigadier George Norton, the Northern Ireland garrison commander.

They are discussing measures to improve security at the remaining army bases as the threat of attack from dissident republican groups deepens.

The attack follows an incident in which a 300lb (136kg) bomb was abandoned last month in Castlewellan, County Down. The device had been prepared for use against another army barracks.

After the meeting at the Massereene base in Antrim, the prime minister will be driven to Stormont to hold talks with the leaders of the power-sharing devolved administration.

He will meet Peter Robinson, the first minister and leader of the Democratic Unionist party, and Martin McGuinness, the Sinn Féin politician who is deputy first minister.

A Downing Street spokeswoman said that there were no plans for the prime minister to visit the injured in hospital.

    Brown holds security talks in Northern Ireland, G, 9.3.2009, http://www.guardian.co.uk/uk/2009/mar/09/brown-arrives-massereene-barracks

 

 

 

 

 

Gordon Brown calls for morality in banking system

Prime minister says financial institutions need to work with integrity to win back confidence of the public

 

Friday 6 March 2009
Guardian.co.uk,  17.24 GMT
Severin Carrell, Scotland correspondent
This article was first published on guardian.co.uk at 17.24 GMT on Friday 6 March 2009.
It was last updated at 17.24 GMT on Friday 6 March 2009.

 

Gordon Brown today said that banking needed to become more moral as he called for an end to the era of "irresponsibility and excess" that brought the international economy close to collapse.

In a speech to the Scottish Labour Party, the prime minister said the banks needed to urgently restore their reputation for honesty and integrity.

Brown declined to accept any direct responsibility for the domestic banking crisis, despite coming under pressure recently to issue some sort of apology. Instead, he insisted it was the banks alone who were solely responsible for their collapse.

"In Scotland, you and I were brought to value hard work and effort, enterprise and honesty, integrity and taking responsibility, and these are the values we live by in our families and our working lives," Brown said.

"They are the values of the good society - and they must now become the values of the good economy. They are the values we must spread throughout our banks and our financial system. We have to clean up for good an irresponsibility and excess that has been exposed in every continent of the world."

Brown confirmed he would be pressing the G20 conference of world economic leaders in London next month to adopt four new principles of banking: an end to tax havens; the ending of the short-term bonus culture; regulation covering the health of the entire financial system, not just individual firms; and the creation of a better global framework for international financial supervision.

"I believe there is an emerging consensus on how we strengthen global regulation of our financial markets to prevent any recurrence of the collapse that has caused so much damage to economies around the world," he said, in a reference to his talks with Barack Obama in Washington this weekend.

"There is an agreement that we cannot allow the approach of the lowest common denominator when we need the highest standards of banking trust.

"We cannot allow a race to the bottom in standards, when we need to be at the best standards all around."

Brown claimed that the UK had already led the world by taking action to tackle the recession and by limiting the damaging effects of the recession on jobs, businesses and ordinary people's lives.

He said: "What's making me angry is that good people, hardworking people, are getting squeezed because of banking mistakes and that is why we need an urgent clear-up and clearing out of our banking system."

Brown also used his speech to launch a renewed attack on the SNP's continuing quest for independence.

He welcomed a Scottish parliament vote on Thursday against staging a referendum on independence next year, but said he would introduce new measures to strengthen the powers of the Scottish parliament if they were recommended by the Calman commission on devolution set up last year.

He said that the scale of the collapse of Scotland's two major banks, HBOS and RBS, the collapse of Iceland's economy, and the sharp fall in oil prices had proven that a country of Scotland's size could not survive alone, outside the United Kingdom.

"People know that what scars Scotland is not its border but poverty. That it isn't flags that matter most to the people of Scotland, but fairness. That it's not building embassies that count for the future, but building greater equality," he said.

Brown also said that, at the suggestion of the Scottish secretary, Jim Murphy, the cabinet would meet in Scotland before the summer - the first time in 100 years that it had met north of the border.

About 15 members of the Union of Communication Workers staged a silent protest during the prime minister's speech, sitting down in the centre of the conference hall wearing white T-shirts which said: "Keep the Post Public".

    Gordon Brown calls for morality in banking system, G, 6.3.2009, http://www.guardian.co.uk/politics/2009/mar/06/gordon-brown-banking-morality

 

 

 

 

 

Now more than ever the world wants to work with you, Brown tells US

Prime minister urges Congress to follow Obama's lead on climate change and economy

 

Wednesday 4 March 2009
16.51 GMT
Guardian.co.uk
Patrick Wintour in Washington
This article was first published on guardian.co.uk at 16.51 GMT on Wednesday 4 March 2009.
It was last updated at 18.41 GMT on Wednesday 4 March 2009.

 

Gordon Brown today made an impassioned appeal to the US Congress to stay true to the spirit of American optimism and let Barack Obama lead the world away from self-defeating protectionism and the perils of climate change.

In a speech designed to lift an often insular Congress, Brown insisted that at a time of peacetime crisis it is the task of government, as the representatives of the people, to be the public's last line of defence.

Urging the assembled members of Congress to have faith in the future, the prime minister told them to recognise that "now more than ever the world wants to work with you". The old divisions in Europe over the Iraq war were over, and a generation of leaders across the European continent were now impatient to work in harmony with a new president willing to seize the moment.

Basing his appeal on conversations with Obama and his team, Brown challenged American legislators to recognise that protectionism and indifference to the environment would be fatal. He told them: "I believe that you, the nation that had the vision to put a man on the moon, are also the nation with the vision to protect and preserve our planet Earth."

Brown, whose speech was punctuated by 16 standing ovations, also asked: "Should we succumb to a race to the bottom, and a protectionism that history tells us that in the end protects no one? No. We should have the confidence, America and Britain most of all, that we can seize the opportunities ahead and make the future work for us."

The invitation to speak to both houses of Congress is a rare honour afforded only four previous British prime ministers and 100 foreign dignitaries since the tradition started with the Marquis de la Lafayette, the French hero of the American revolution, in 1824.

Brown pointed out that past prime ministers had come to the Capitol building to speak at times of war, but he came to talk of new battles, "to speak of a global economy in crisis and a planet imperilled".

With reference to Franklin Roosevelt's dictum that "the only thing we have to fear is fear itself", he urged Americans to remember "something that runs deep in your character and is woven in your history: we conquer our fear of the future through our faith in the future".

The prime minister appealed to Congress to recognise that at a time of crisis there was a new need for the world to come together to fight recession.

"When banks have failed and the markets have faltered we, the representatives of the people, have to be the people's last line of defence. And that is why there is no financial orthodoxy so entrenched, no conventional thinking so ingrained, no special interest so strong, that it should ever stand in the way of change that hard-working families need."

In a bid to lure America into joint action on regulation and banking, he said: "You now have the most pro-American European leadership in living memory, a leadership that wants to cooperate more closely together in order to cooperate more closely with you. There is no old Europe, no new Europe, there is your friend Europe. So seize the moment."

He said little about his belief, voiced incessantly in Britain, that the economic crisis had been caused by reckless American banking in the mortgage market, simply saying "an economic hurricane has swept the world creating a crisis of credit and confidence".

But echoing Alan Greenspan, his former guru and one-time chairman of the US Federal Reserve, he explained: "The very financial instruments that were designed to diversify risk across the banking system instead spread contagion across the globe. And today's financial institutions are so interwoven that a bad bank anywhere is a threat to good banks everywhere."

He said the recent events had "forced us all to think anew", adding: "I have learnt many things."

Brown also tried to shed his image as a dry schemer of new international financial architecture. Adopting a more empathetic rhetorical tone, he said: "Let us be honest tonight: too many parents, after they put their children to bed, will speak of their worries about losing their jobs or the need to sell houses. Too many will share stories of friends or neighbours already packing up their homes and too many will talk of a local store or business that has already gone to the wall.

"For me, this global recession is not just measured in statistics or in graphs or in figures on a balance sheet. Instead, I see one individual with their own aspirations and increasingly their own apprehensions, and then another and then another. Each with their own stars to reach for. Each part of a family, each at the heart of a community, now in need of help and hope."

He received a roar of approval when he said everyone's savings would be safer "if the whole world finally came together to outlaw shadow banking systems and offshore tax havens".

Brown also spelled out the importance of climate change and the need for America to sign an international agreement limiting worldwide emissions at the forthcoming UN conference in Copenhagen. George Bush had repeatedly vetoed American participation in the agreement, but Obama has promised to introduce a cap and trade bill similar to the EU emissions trading scheme.

Obama faces a fight to get the legislation through Congress as many congressmen fear it will cost their electorate too much. But he argued: "The new frontier is that there is no frontier. The new shared truth is that global problems need global solutions."

Urging a historic agreement at Copenhagen, he said: "We must commit to protecting the planet for the future generations that will come long after us." Adapting a Greek proverb, he asked: "Why does anybody plant the seeds of a tree whose shade they never will see?"

And, on Iran, he receive an ovation when he said Tehran had to cease its threats and stop its nuclear programme.

The opening passages of his speech were littered with flattering references to the American dream and the US sacrifice in two world wars, remarks that are standard for visiting dignitaries making such addresses. He described America as the indispensable nation and the irrepressible nation.

"Throughout your history, Americans have led insurrections in the human imagination, have summoned revolutionary times through your belief that there is no such thing as an impossible endeavour. It is never possible to come here without having your faith in the future renewed."

He also won warm applause when he announced that the Queen was to bestow a knighthood on Edward Kennedy, the veteran Democrat senator and a friend of Brown.

    Now more than ever the world wants to work with you, Brown tells US, G, 4.3.2009, http://www.guardian.co.uk/politics/2009/mar/04/gordon-brown-congress-speech-obama

 

 

 

 

 

Brown accuses RBS of taking ‘irresponsible risks’

 

Published: January 19 2009 08:34
Last updated: January 19 2009 14:08
The Financial Times
By Alex Barker, Maggie Urry and Peter Thal Larsen


Gordon Brown on Monday unveiled a second bank rescue package including powers for the Bank of England to lend up to £50bn directly to businesses, as he accused the Royal Bank of Scotland of taking ”irresponsible risks” as the bank’s shares collapsed.

His comments came as RBS on Monday warned it could report an annual loss of up to £28bn, following the mis-timed acquisition of ABN Amro, the Dutch lender it acquired as part of a €71bn (£63bn) hostile break-up bid in 2007.

”Almost all their losses are in subprime mortgages in America and related to the acquisition of ABN Amro. These are irresponsible risks taken by the bank with people’s money in the UK,” Mr Brown said, adding that the decision to buy ABN ”was wrong”.

The outburst from Mr Brown came as the Treasury agreed to replace the £5bn in RBS preference shares held by the government since the October bailout with ordinary stock. This will increase government ownership to almost 70 per cent.

Shares in RBS fell 20.1p or nearly 60 per cent to 14.6p, valuing the bank’s capital at less than £6bn, as investors feared the bank may be fully nationalised.

Stephen Hester, chief executive of RBS, said that full nationalisation was something that was discussed over the weekend with the government but it was ”something we all wished to avoid.”

The government’s decision to increase its RBS holding was part of a second bailout package designed to shore up Britain’s struggling lenders.

In an effort to bring down borrowing costs, a new £50bn fund will be established to allow the Bank to extend loans to some of Britain’s biggest companies. Alistair Darling, chancellor, said the Bank would take ”security and assets” that would be sold on ”once the economy starts to improve”.

Denying that he was ”writing a blank cheque” for the banks, Mr Brown said the steps were necessary to revive lending in the economy and compensate for retrenchment of the world’s banking system.

The establishment of the Bank’s corporate lending fund will have a neutral effect on money supply. But it provides the framework for the Bank of England to implement a policy of ”quantitative easing” or effectively pumping money into the economy should it decide there is a need to do so.

Sterling, however, fell against leading currencies including the yen, dollar and euro in reaction to the government’s latest measure to shore up the UK’s financial system. UK government bond prices also fell forcing gilts sharply higher.

Lee Hardman at Bank of Tokyo-Mitsubishi UFJ said: “The government is putting the framework in place for the Bank of England to move towards quantitative easing, which would tend to be negative for sterling, because it would increase the supply of currency in the market. The market is anticipating that and sterling has fallen accordingly.”

The reaction in equity markets was broadly positive with the FTSE rising nearly 2 per cent in morning trading after suffering heavy falls last week.

The scheme, which will be detailed more fully by the end of February, will allow banks to buy government protection for eligible assets by paying a fee, which will be agreed case by case. The fee is most likely to be paid through the issue of preference shares to the government, but the Treasury said it would consider taking cash.

The banks will remain responsible for a “first loss” amount, similar to an excess in a normal insurance claim, and will also remain liable for about 10 per cent of the residual loss. The government insisted on this clause to make sure the banks had an incentive “to endeavour to keep losses to a minimum.”

The assets can be denominated in any currency. Those most likely to participate in the scheme are portfolios of commercial and residential property loans; structured credit assets, including certain asset-backed securities; and other corporate and leveraged loans. The scheme is expected to continue for at least five years.

Similar schemes are expected to be set up in other countries, and the government said it would hold discussions with its international partners to co-ordinate them. Details of a similar scheme being considered by the US government are expected to emerge in the coming days, while other countries are expected to follow.

The new measures to stabilise the financial system and encourage banks to start lending again is unlikely to have an immediate cost to the taxpayer, economists said, but could cause the already severely stretched public finances to get even worse should further large losses materialise on assets guaranteed by the government.

The fresh efforts to help banks are ”exposing the public finances to more risk” than the original bailout package, according to Gemma Tetlow of the Institute for Fiscal Studies.

Among the other measures, the government said it would extend the credit guarantee scheme which had been due to expire in April to the end of the year. It announced a new guarantee scheme, to begin in April, for triple-A rated asset-backed securities, including mortgages and consumer debt.

It announced that Northern Rock would stop winding down its mortgage book and return to offering new loans in an attempt to bring new capacity into the mortgage lending market.

    Brown accuses RBS of taking ‘irresponsible risks’, FT, 19.1.2009, http://www.ft.com/cms/s/0/7de5d2f8-e601-11dd-8e4f-0000779fd2ac.html

 

 

 

 

 

Tough lap for the marathon man

Relaxing in his Queensferry home amid the clutter of a family Christmas and with his two-year-old son bursting in and out, the prime minister is in determinedly upbeat mood as he talks about his own extraordinarily tough political journey so far, the hard economic times ahead, keeping the environment a priority, and his new year's resolution to get fitter

 

Sunday 4 January 2009
The Observer
Gaby Hinsliff
This article was first published on guardian.co.uk at 00.01 GMT on Sunday 4 January 2009.
It appeared in the Observer on Sunday 4 January 2009 on p6 of the News section.
It was last updated at 01.14 GMT on Sunday 4 January 2009.

 

Settled into his armchair by the fire, the prime minister may be two days into the new year, but he is still surrounded by the cosy detritus of a family Christmas.

There is a half-drunk glass of white wine abandoned on the coffee table at his Queensferry home - the Browns had friends around for dinner the previous night - and a stack of children's books and board games piled lopsidedly under a Christmas tree now shedding needles with abandon. His two-year-old son, Fraser, bursts in periodically still clad in his pyjamas and scrambles gleefully on to his father's lap.

Whether or not prompted by festive indulgences, Brown candidly admits that his new year's resolution is to get fitter: he has taken up running, albeit only "a mile or two" at a time. "I will never be able to be back to being the sprinter that I used to be," says the former schoolboy athlete ruefully, "but I want to be fitter. What would I do a mile in? It's a bit more than it used to be."

Which is ironic, since in politics Brown is the master not of the sprint but the marathon: doggedly staying the course, throughout the frustrated years under Tony Blair, to emerge at the head of the pack - only to find that the toughest leg of the race lay ahead. Last summer it seemed he had been permanently overtaken by more lightfooted rivals, from David Miliband to David Cameron. But then the world plunged into economic crisis, and now Labour's tortoise is once again gaining on the hare.

He shrugs off questions about how punishing that race has been, but the fizzy water at which he sips hints at the strains. Brown has given up tea and coffee after realising that the caffeine did him no favours under stress.

Yet even here, among the minutiae of domestic life, Brown's mind is on wider horizons. He wants to talk about the big picture: global economic trends, the birth of a new world order, billions to spend. He refuses to dwell on the personal - his extraordinary recent political journey to the brink and back is dismissed as merely "the highs and lows of politics", one borne as stoically as the other - and brushes aside talk of what he calls the "trivia" of personality politics. "I think it was Barack Obama who said that the bigness of the challenges counterposed against the smallness of our politics ... I sometimes think that in Britain we actually are in danger of losing sight of these big challenges by concentrating on who said what, when, how on a particular day in some House of Commons exchange."

The challenges are certainly big. But on the day that the British Chambers of Commerce predict one in 10 Britons will soon be out of work, Gordon Brown is in determinedly upbeat mood. He mocks the Observer for being too pessimistic in our questions: " 'Can we afford this, can we afford that'! I'm more optimistic about our ability to be a successful economy creating large amounts of wealth in the future."

The world economy will double in the next 20 years regardless of the downturn, he insists; he believes Britain can sell to emerging markets in India and China, despite slowing growth in Asia. His huge pile of bedside reading has recently included Fareed Zakaria's book The Post-American World, which argues that the era of US world dominance is ending with India, China, Russia and Brazil emerging as new powers. "I don't buy the argument that the beneficiaries of the next age of globalisation are only the Asian countries," he says. "These [British goods] are the products that the world will want to buy. I don't see us muddling through a difficult set of economic events. I see us as equipping ourselves to meet the big challenges of the future."

Yet many Britons will return to work tomorrow unsure what the immediate future holds for them, which is why this month Brown will be focusing on jobs. He will host a summit on boosting employment on 12 January, promising to create jobs through public works - in an echo of Franklin D Roosevelt's New Deal, launched in the 1930s to help America literally build its way out of a depression - and preserve existing jobs by persuading the banks to lend more freely to business again.

Furthermore, he insists it can all be done while simultaneously saving the planet, arguing that investing in eco-friendly projects could both create jobs now and engineer a lean, low carbon economy for the long term. "Rather than [the recession] pushing the environment into a lower order of priority, the environment is part of the solution."

He is similarly bullish about any suggestion that, after a decade running the economy from the Treasury, he could have done more to avert that recession. Does he accept with hindsight that it was asking for trouble to let credit card debt spiral so high, or allow banks to offer mortgages of six times salary? "We have to look at this in historical perspective," says Brown. "The demand for home ownership has been growing radically and we wanted to help meet that demand for home ownership. There's more than one million new homeowners [created] in the last few years."

But what if some of them now lose those homes? Even then it appears he would have no doubts, merely remedies: "We are going to do everything in our power to stop repossessions." While he admits he himself has a "Presbyterian background" of fiscal caution, the prime minister says there is nothing wrong in people wanting to have "the best for their families".

Besides, he argues, in normal times even large mortgages would still be manageable: it is only because the banking system has seized up unprecedentedly, choking off credit, that people are squeezed. "This financial crisis is less to do with the level of personal debt in any single economy and it's more to do with a failure in the financial system itself. If you look at the economy in normal situations, where we have low inflation and low interest rates, people are able to pay their mortgages."

His only regret, he suggests, is that he could not get other countries to agree to tighter regulation of international banking until it was too late: he wanted to do it, he says, after the Asian bubble burst in the late 1990s. "I don't want to sound arrogant, but 10 years ago I was making both speeches and proposals to sort out this failure of global regulation and I couldn't persuade other countries after the Asian crisis of 1998 that it was necessary."

Brown hopes his warnings will be heeded more closely at this spring's G20 summit, which he argues must devise a "global recovery plan" modelled on Britain's. He insists that, when Barack Obama unleashes his own fiscal stimulus package for the US shortly, Britain's actions will be viewed more positively. He is frustrated that the debate has come to be seen as a "battle between monetarists and Keynesians" about the rights and wrongs of borrowing rather than, as he suggests, a pragmatic response to unique events.

Outside the window as he speaks, a weak shaft of sunlight breaks through the January drizzle. This, Brown jokes, counts as good weather for Scotland. The prime minister thinks he can see sunshine through the clouds of economic gloom: his task now is to persuade anxious voters to see it too.



... On Gordon Brown

You lost a couple of significant byelections; you had a backbench revolt over 10p tax. It was a tough year. In your darkest days, with speculation about a leadership challenge, how were you feeling?

"I have had more difficult days than that. You have just got to keep going. As long as you know you have got a plan for doing things, you can deal with most of the problems that come your way. I felt at the time we had to get across what we were trying to do. I saw the difficulties we faced in the world economy and I wanted to be able to get people together to deal with that."



Did you ever doubt that you would come through it?

"I was determined. But in politics it's up to a lot of people to decide what happens; it's not up to one person."

When did you decide to make those changes to the cabinet and, in particular, to invite Peter Mandelson back? What was it that caused you to think about doing that then?

"I only asked Peter Mandelson to come back the Wednesday before it was announced on the Friday. I had never talked to him about that until that week... but I was looking at how we could strengthen the government. In a situation where you have these huge challenges, you need the best people."

 

What are you reading currently?

"All sorts of things. I have been reading a novel about Afghanistan that's won all the prizes, The Kite Runner. It's really good. And quite a few books about the Middle East at the moment, because I think it's really important to find out what's going on."

 

 

 

Challenges in the year ahead

20 January Inauguration of President Obama in the US. His stance on climate change, the Middle East and the war on terror may be closer than George Bush's to British interests, but arguments over trade protectionism are possible. Potentially embarrassing if he meets other world leaders before Brown.

February Elections in Israel, which could influence progress on Middle East peace.

March The budget is due. Judgments will be made about whether the VAT cut and other economy boosting measures in the pre-budget report have worked. End of last quarter of financial year could see the worst of job losses in retail.

April G20 summit at which Brown will propose a global economic recovery plan. If other states follow his fiscal stimulus lead, it could be a triumph; if not, he will look isolated.

April/May If Labour is still within sight of the Tories in the polls, pressure for a spring election will be intense. But it would be a massive gamble in the middle of what could be major job losses.

June European parliament elections: the Tories will focus on Brown's refusal to hold a referendum on EU expansion.

September A year on from the banking collapse, Brown's response will be judged at the Labour party conference.

November Copenhagen climate change conference at which a successor deal to Kyoto must be agreed.

    Tough lap for the marathon man, O, 4.1.2009, http://www.guardian.co.uk/politics/2009/jan/04/gordon-brown-interview