‘THIS is a difficult and dangerous situation for the world economy,’ Prime Minister Gordon Brown said yesterday in an interview for the ‘Observer’ newspaper.
Brown also said that in ‘certain instances’ it was necessary for the police to hold people for 42 days without charge – and that civil rights group Liberty had already ‘recognised’ this.
‘It looks like Britain is facing the bleakest economic outlook in 10 years. Is this your biggest challenge as you deal with real public disquiet over economic issues?’ Brown was asked.
He responded that the ‘credit crunch. . . has got an impact on all the major industrial economies’, adding: ‘You’ve also got potentially an inflation problem. . . and that is always a very dangerous time for the international economy.’
Brown when he was chancellor boasted that he had ended the boom-to-bust cycle that is associated with capitalism.
He also mocked those who said that gold was the only real money commodity.
He called this belief barbarous and sold off over half of Britain’s gold reserves, making a loss of some £3.4 billion – now that the price of gold has reached $869 an ounce.
In his interview, he was fearful saying: ‘The question for Britain is how will we fare over these next few months?
‘I believe that we’ve got to be vigilant. We’ve got to act quickly where there are difficulties. We’ve got to work very closely on the side of business facing this difficult time.’
Brown claimed that ‘Britain is better placed than most to withstand the global turbulence’, following ‘very difficult decisions we made at the beginning of last year on public sector pay’, which he admitted were ‘not popular decisions’.
But asked what he had to say to people facing rising mortgages and fuel bills, he tried to deflect attention to America and ‘rising oil prices’, claiming that by taking ‘difficult decisions’ about pay and public spending ‘we’ve got ourselves in a better position’.
Brown admitted that ‘there are difficulties ahead’ with inflation, because ‘utility prices are rising’, but still claimed that ‘inflation is sufficiently low to enable the Bank of England to have the flexibility on interest rates’.
The former chancellor claimed there was a ‘general view that we had to stage public sector pay in order to get inflation down’ and that it was these ‘tough’ decisions that have characterised ‘what I’ve tried to do in the economy over the last 10 years’.
But asked about the personal debt crisis, all he could say was that there should be ‘education in financial management’ and ‘literacy’ in schools and colleges, whilst adding that ‘in a dynamic economy . . . some people will get themselves into difficulty’.
Speaking about plans for 42 days detention for terrorist ‘suspects’, Brown said: ‘A few months ago Liberty published its proposals and said that there were circumstances in which you might have to go beyond 28 days.
‘They proposed using the Civil Contingencies Act to do so,’ he said. ‘They recognised therefore that there are circumstances in which you have. . . to detain people beyond 28 days.’
He also claimed that ‘when it comes to foreign nationals and the danger of illegal immigration . . . most people would support there being some form of identification that people are asked to produce.’
• Yesterday morning Brown urged MPs to accept a 1.9 per cent wage rise.
He said: ‘We must show exactly the same discipline that we ask of other people.’
