British prime minister Gordon Brown warned today of a decade of low growth and high unemployment if the Conservatives are voted into office to carry out their plans for rapid cuts in public spending.
Mr Brown was speaking as he unveiled a £16 billion programme of asset sales as part of a deficit reduction plan to bring down the massive state debt built up during the recession.
Some £3 billion of assets are planned to be sold off over the next two years - including the Tote, the Dartford crossing, the Channel Tunnel rail link, and the Student Loan book. Much of the rest of the funds will be realised by encouraging local authorities to exchange assets for cash.
Mr Brown said Britain was “only halfway there” in overcoming the recession, and warned that cutting back spending too soon risked repeating the mistakes of the 1930s and thrusting the country into depression.
It was “essential”, alongside reducing the deficit, to continue the fiscal stimulus, invest in improving workers’ skills to boost the UK, and work with Europe and the rest of the world to restore the global economy.
Speaking to an audience of economists in London, Mr Brown said: “There is a fundamental divide within British politics.
“Some people would withdraw the fiscal stimulus now, at a time when the economy is still in difficulty; some people would stop quantitative easing today and that would imperil the recovery; some people would fail to invest in the productive sector of our economy, so we are denied a future in high-skilled and knowledge-based industries; some people would withdraw the co-operation that is necessary with our European partners and the rest of the world to enable the only way the international economy can function in the future, with the international co-operation that is necessary.
“I will fight over the next few months for what I believe. I believe we have been proved right over the last year to restructure the banking system and make sure there is international co-operation and deal with the problem that arises from the lack of stimulus in the economy by taking fiscal and monetary action.
“I am absolutely sure that, over the next year, the pursuit of growth in the context of a deficit reduction plan that is sensible and properly timed, and at the same time the pursuit of an investment- and export-led growth strategy, alongside international co-operation, is the only way that we can avoid a decade where growth will be low and unemployment high.
“I am an optimist. I believe that working together, we can make a difference.”