Crisis Pre-Budget

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Britain has had to face ‘the toughest and most challenging year for the economy’ in which it has seen predicted economic growth halved to 1.75 per cent, admitted Chancellor Gordon Brown in his Pre-Budget Report to the House of Commons yesterday.

Brown said: ‘the last year has seen a virtual doubling of global oil and commodity prices’.

He complained: ‘While all countries have faced global inflationary pressures, the British economy has also had to deal with domestic inflationary pressures. . .’

But he claimed Britain is ‘on course to meet our inflation target of two per cent’ and house prices ‘have moderated to three per cent.’

Ignoring his March prediction of 3.5 per cent annual economic growth, Brown hurriedly announced ‘growth even in this toughest year at 1.75 per cent’.

He admitted that the future for capitalism is murky.

‘Globally, there are continuing risks from trade imbalances, exchange rate movements and commodity price shocks and domestically, monetary policy will continue to closely monitor the housing market and consumer spending.’

Brown demanded ‘continued wage responsibility in all sectors.

‘So the Health Secretary is submitting evidence to the pay review body that headline rise in NHS pay should be based upon our 2 per cent inflation target.

‘And the Education Secretary is announcing that even after taking account of annual increments and performance pay the total increase in the education pay bill will be just 2.8 per cent – both signals of our determination to keep public pay costs under control and contribute to low inflation.’

Yesterday, the NUT general secretary Steve Sinnott called the teachers’ settlement from Septemer 2006 of 2.5 per cent ‘a standstill award’.

Brown went on to outline plans to extend the New Deal cheap labour programme.

He added: ‘The New Deal pilots to help lone parents back to work will be extended to new areas of the country.

‘And for men and women unemployed six months or over, we will pilot from April, personal action plans starting with compulsory interviews and an intensive work plan.’

Brown went on to boast about the number of Civil Service jobs slashed, saying: ‘On target, we have also seen the reduction of a further 18,500 civil service posts, including over 10,000 from the Department for Work and Pensions and 3,500 from Revenue and Customs.

‘And I can also confirm that we are on target with the relocation of a further 2,000 civil service posts out of London including to Bridgend, Cardiff, Derby, Leeds, Edinburgh, Liverpool, Manchester, Newport and Taunton.

‘And ahead of schedule, £5.7 billion of assets have been sold – on target to meet our objective of £30 billion by 2010. And in the coming year we will conduct a zero based asset review.’

But there is to be more aid for business, with help on VAT and concessions for the film industry.

He continued: ‘Defending our country is the first duty of government.’

He added: ‘Since September 11th we have doubled the budget for national security.

‘Today we are making available an additional £135 million for security and counter-terrorism.’

• Second News story

SADDAM DEFIES STOOGE COURT

The ‘trial’ in Baghdad of Iraqi President Saddam Hussein was yesterday resumed, then suspended after a walk out by defence lawyers, then resumed again after the judge agreed that former US Attorney General Ramsey Clark address the tribunal.

Clark had led a walkout by the defence team after Chief Judge Rizgar Mohammed Amin said foreign lawyers could not address the court.

In response to the walkout, the judge said the court would appoint a substitute defence team.

President Saddam Hussein rose to his feet shouting: ‘Long live Iraq, long live the Arab nation!

‘This is Iraq, we will not accept American stooges!’

Fellow defendant, Saddam’s half brother Barzan Ibrahim al-Tikriti shouted out: ‘You may as well execute us now!’

After a 90-minute recess, the judge reversed his ruling.

Back in the court, Clark said: ‘Without protection for defence lawyers, a fair trial is impossible’.

Former Qatari Justice Minister Najib Nuaimi added that the court was ‘illegitimate’ as it was set up by the occupation and followed former US overseer Paul Bremer’s rules.

The judge proceeded to take ‘evidence’ from the first witness, Mohammed Hassan al-Dujail, a well-known member of the Shi’ite Dawa party.

Saddam listened to Mohammed’s testimony of alleged abductions and torture with close attention but interrupted him on several occasions.

As Mohammed began, the Iraqi president said: ‘Rest assured I will not touch you.’