An update on the issue! It would appear that the ground for argument is shifting from the need for drastic cuts to their timing. In practice this is a somewhat academic argument since no cuts - except the January rise in VAT - can be implemented until after the election and then such cuts would take time to take effect!
The first report on Brown at the EU’s Council meeting shows him at his most devious. He has recognised that he is losing the argument at home and is trying, through the EU and the G20, to tie the hands of any succeeding prime minister .
Watch his international manoeuvrings with enormous care.
Christina
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EU OBSERVER 18.9.09
Brown to EU: Maintain stimulus or kill off recovery
LEIGH PHILLIPS
BRUSSELS - UK Prime Minister Gordon Brown has warned that now is not the time to bring an end to economic stimulus, putting less emphasis on "exit strategies" than other European quarters. To do so risks derailing the global economy's apparent turnaround.
"Our economies have started what we believe is the road to recovery," he said, speaking to reporters ahead of a summit of European leaders, but warning "It is no time for business as usual."
European Union leaders are meeting in Brussels to prepare a common position to take to next week's G20 meeting of the world's leading industrialised and developing countries.
He praised the unprecedented international co-operation that had been achieved in the battle to tame the economic crisis he said presented levels of unemployment on the scale of the Great Depression of the 1930s.
"Not even the Marshall Plan achieved such structured, co-ordinated action."
Nevertheless, he said that in Pittsburgh, the world faces a major choice: "Whether to maintain emergency action or risk choking off recovery."
He argued that all countries must implement the stimulus packages they had earlier committed to.
"The global recovery depends upon it."
However, Finland's centrist prime minister, Matti Vanhanen, told reporters as he arrived at the summit: "Today everyone recognises the importance of co-ordinating exit strategies."
"It is clear that exit strategies need to be tailored to country-specific conditions," he continued. "However, by carefully co-ordinating the timing of the exit strategies within the EU, we should be able to optimise European economic growth."
He went on to underscore the importance of consolidating public finances, recognising that taxes are "bound to increase."
Here too, he opined that co-ordination was necessary. "I am not asking for harmonised taxation, but intelligent co-ordination and common political guidelines to prevent harmful tax competition."
Permanent G20
Mr Brown also said that he intends to propose to his fellow European leaders that the G20 be made "a permanent institution."
He added that the crisis had shown that the world needed to "commit to even greater levels of economic co-operation in the future."
"If we are to meet the challenges ahead, we need to change not just our policies but the way we make policies," he said, describing a "new governance structure" for the world to "allow the G20 to provide continued political leadership and economic management"
He said that he will propose to other European leaders "a historic global pact for jobs, sustainability and growth."
He also backed French and German calls for limits to executive pay, but that such restrictions need to be committed to at an international level to avoid companies escaping to jurisdictions with more lax regulation.
The British prime minister said that calls for caps on bankers' bonuses were not just populist exercises.
"Irresponsible remuneration policies were one of the factors that put the global economy at risk," he said.
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THOSE CUTS - WHO’S SAYING WHAT? 17-18.9.09
Via Politics Home
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Brown plays down "lying" accusations over spending cuts
The Prime Minister has rejected accusations from the Conservatives that he misled parliament about government spending plans following the leak of secret Treasury documents.
The figures, pubished yesterday, suggested the government had been planning for cuts in departmental budgets of nearly 10%, but the Prime Minister said the government has always been "prepared to discuss and debate" parts of the budget.
"Under no circumstances have we done anything other than publish the documentation that was essential at the budget and been prepared to discuss and debate the figures that have risen from that," he said.
He also warned that the G20 must not do anything to "derail" economic recovery despite signs of recovery in some countries.
"I've said it's not automatic, I've said we can't take it for granted, I've said it's fragile even in countries where there is some evidence of growth," he said.
He added: "We would have to evidence that the recovery is assured and I think that's what other countries are looking for."
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BBC Radio 4 - “Today”
Rushing into spending cuts would be disastrous, warns Cable
•Vince Cable MP, Liberal Democrat Treasury spokesman
Mr Cable warned that rushing into a contraction of government spending would be disastrous for the economy, but said that in the long term a figure in the region of £80bn over the next parliament would have to be saved through spending and tax measures.
He said “much of the pain of the current crisis has been absorbed by the government”, and added that that was “fine in the short run...but can’t be sustained for many years”.
Asked about areas of spending he would consider cutting he said: “One has to look at everything. It isn’t sensible to say there are certain areas we can’t go anywhere near.
“The list I have suggested is really just a first cut at the problem. We are going to have to look at public sector pensions. We can’t continue on the present system.
“This doesn’t add up to the full scale of cuts that is going to be required. It is eventually going to be a combination of spending and tax measures.
“I don’t think you can rush into this. To rush in now...would be disastrous, it would make the recession worse.”
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