Brown package aims to boost lending

BRITISH PRIME minister Gordon Brown and chancellor Alistair Darling have agreed a new package of measures designed to ease the bank lending crisis and enable small businesses and those seeking mortgages to access the funds they need.

Mr Brown confirmed that an announcement was imminent yesterday as he launched a £500 million scheme promising to help 500,000 people into work or training. The Conservatives claimed the latest government initiative was based on their original proposal and did not anyway go far enough. The Liberal Democrats, meanwhile, accused Labour of rehashing old ideas and “extending existing programmes”.

Amid predictions that unemployment could rise from 1.8 million to almost three million over the next 12 months, Mr Brown insisted that the latest government action would most directly benefit those at risk of joining the ranks of the long-term unemployed. With employers to be given up to £2,500 for every person they train who has been unemployed for more than six months, work and pensions secretary James Purnell cited this as proof that Labour had “learned from previous recessions” the need to ensure people did not feel out of touch with the labour market. “We don’t want to waste a generation of people, as happened in the past,” he said in obvious reference to the Thatcher era.

Mr Brown also carried the recession/pre-election battle of ideas to the Conservatives with the charge that their policies would effectively cut “investment” or spending on vital services such as child benefits, maternity and paternity leave and nursery education.

The prime minister was responding to a new Tory poster campaign with the hard-hitting message that fast-rising government debt means “every child in Britain is born owing £17,000”. The poster, which will be displayed on 260 sites across the country, marked the latest stage in Conservative leader David Cameron’s campaign against what he calls “Labour’s debt crisis”.

The poster features a photograph of a baby with the slogan: “Dad’s nose, mum’s eyes, Gordon Brown’s debt – Labour debt crisis. Every child in Britain is born owing £17,000. They deserve better.”

During an interview on BBC Radio 4's World at Oneprogramme Mr Brown countered that the Conservatives would not invest in the necessary provisions for that child, while claiming Mr Cameron was effectively at odds with most countries around the world in terms of the large-scale financial stimulus needed to weather the recession.

Mr Cameron dismissed the suggestion that he was internationally isolated, insisting rather that Britain, unlike Germany or the United States, could not afford such a policy. “The difference between (German chancellor) Angela Merkel and Gordon Brown is that she did fix the roof when the sun was shining,” said Mr Cameron. “Germany went into this recession with a surplus; they have got their budget back into balance. So the key thing you have to ask is: ‘What is it that each country can afford to do?’”

With the national debt set to top £1 trillion in several years time, Mr Cameron said the interest payments alone would amount to more than was spent educating the country’s children. “Labour are getting it wrong,” Mr Cameron maintained. “It’s easy for politicians to talk about tax rates and borrowing as if there was no tomorrow. But there is a tomorrow and it’s going to be paid for by our children.”

In his speech at a jobs summit in London, Mr Brown outlined plans to prepare Britain for future growth in key sectors, saying: “Failure to act now and to do so in co-ordination with our international partners would mean a deeper and longer global recession. It would mean temporary rises in unemployment becoming permanent. It would mean as in the past whole communities written off, and that would mean lasting damage to our economy and a bigger bill to pay in the future. This will not happen on my watch.”