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Brown takes stimulus plan to US Brown takes stimulus plan to US
(about 3 hours later)
Gordon Brown will repeat calls for greater fiscal stimulus and more financial regulation on a visit to the US as part of his pre-G20 summit tour.Gordon Brown will repeat calls for greater fiscal stimulus and more financial regulation on a visit to the US as part of his pre-G20 summit tour.
The UK leader's strategies for reviving the economy appear to have been broadly backed by US President Barack Obama. The UK prime minister's plans to revive the economy appear to have been broadly backed by US President Barack Obama.
In a newspaper article Mr Obama said he wanted a sustained fiscal stimulus, but earlier Bank of England head Mervyn King warned against more UK spending. Mr Obama backs a sustained stimulus, but Bank of England head Mervyn King has warned against more UK spending.
The BBC's Nick Robinson said the PM will try to put the warning behind him. Downing Street says there is no rift between the PM, the chancellor and Mr King over fiscal policy.
The prime minister's spokesman said he "does not recognise the reports of a split".
His spokesman said any decisions on a fiscal stimulus would be taken by the chancellor in the Budget.
Fiscal boost
Mr Brown repeated his call for a "worldwide fiscal and monetary stimulus" at the European Parliament on Tuesday.
The prime minister is touring three continents ahead of next week's G20 summit, calling on governments to back plans for possible further stimulus action.The prime minister is touring three continents ahead of next week's G20 summit, calling on governments to back plans for possible further stimulus action.
Tax havens
Downing Street was insisting that more spending and more borrowing was just one of the ways to get the economy going again, he said.
In the article - published in newspapers around the world - President Obama said he wanted to see bold action to kick start the global economy, including what he called a "robust" and "sustained" fiscal stimulus.
And in a speech in Washington DC President Obama said his plan was based on creating new jobs, rejuvenating the housing market, and creating new liquidity and lending by the banks.
G20 LONDON SUMMIT World leaders will meet next weekl in London to discuss measures to tackle the downturn. See our in-depth guide to the G20 summit.The G20 countries are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, the US and the EU. Q&A: G20 Summit EU chokes on economic rescue Europe 'must lead downturn fight' G20 LONDON SUMMIT World leaders will meet next weekl in London to discuss measures to tackle the downturn. See our in-depth guide to the G20 summit.The G20 countries are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, the US and the EU. Q&A: G20 Summit EU chokes on economic rescue Europe 'must lead downturn fight'
He said all countries must share the burden of rescuing the global economy from its worst crisis in decades. In an article - published in newspapers around the world - President Obama said he wanted to see bold action to kick start the global economy, including what he called a "robust" and "sustained" fiscal stimulus.
And in a speech in Washington DC he said his plan was based on creating new jobs, rejuvenating the housing market, and creating new liquidity and lending by the banks.
All countries must share the burden of rescuing the global economy from its worst crisis in decades, he added.
"All of us are going to have to take steps in order to lift the economy," he said."All of us are going to have to take steps in order to lift the economy," he said.
"We don't want a situation in which some countries are making extraordinary efforts and other countries aren't, with the hope that somehow the countries that are making those important steps, lift everybody up.""We don't want a situation in which some countries are making extraordinary efforts and other countries aren't, with the hope that somehow the countries that are making those important steps, lift everybody up."
Mr Brown addressed the European Parliament in Strasbourg on Tuesday. The tour will later take him to Brazil and Chile. But Czech prime minister Mirek Topolanek, who lost a "no confidence" vote in his own parliament on Tuesday, suggested the US recovery plans were the "way to hell".
On Wednesday will take part in a question and answer session at the Wall Street Journal in New York. Mr Brown addressed the European Parliament in Strasbourg on Tuesday. The tour will also take him to Brazil and Chile.
'Heavily indebted''Heavily indebted'
On Wednesday will take part in a question and answer session at the Wall Street Journal in New York.
At a breakfast hosted by the newspaper, he hopes to persuade bankers - and its new owner Rupert Murdoch - to back his ideas for increased financial regulation, an end to tax havens and further action to stimulate the economy, said Nick Robinson.At a breakfast hosted by the newspaper, he hopes to persuade bankers - and its new owner Rupert Murdoch - to back his ideas for increased financial regulation, an end to tax havens and further action to stimulate the economy, said Nick Robinson.
He will later take part in another question and answer session, with students at New York university, before going on to hold talks with UN secretary general Ban Ki-moon.He will later take part in another question and answer session, with students at New York university, before going on to hold talks with UN secretary general Ban Ki-moon.
The government has lost all credibility when it comes to fiscal stimuli Vince CableLiberal Democrats King warns against more spending The government has lost all credibility when it comes to fiscal stimuli Vince CableLiberal Democrats King warns against more spending
On Tuesday Mervyn King, the governor of the Bank of England, had cautioned against further significant government spending to stimulate the economy.On Tuesday Mervyn King, the governor of the Bank of England, had cautioned against further significant government spending to stimulate the economy.
Given the high levels of UK debt as a result of recent stimulus packages, Mr King questioned the wisdom of increasing debt by spending more.Given the high levels of UK debt as a result of recent stimulus packages, Mr King questioned the wisdom of increasing debt by spending more.
But he did say that there was room for further "targeted and selected measures" in some areas of the economy.But he did say that there was room for further "targeted and selected measures" in some areas of the economy.
The remarks have been interpreted as a warning to Mr Brown, who has been pressing the case for wealthy countries to bring forward big fiscal stimulus packages to refloat the economy.The remarks have been interpreted as a warning to Mr Brown, who has been pressing the case for wealthy countries to bring forward big fiscal stimulus packages to refloat the economy.
But former Paymaster General Geoffrey Robinson, a close ally of Mr Brown, said there was a "very good relationship" between the governor and the PM.But former Paymaster General Geoffrey Robinson, a close ally of Mr Brown, said there was a "very good relationship" between the governor and the PM.
He said people were "misunderstanding what Gordon is trying to do" - saying the prime minister was simply planning ahead and doing everything possible to restore confidence, part of which was reassuring people he was "ready and willing to take action when necessary".He said people were "misunderstanding what Gordon is trying to do" - saying the prime minister was simply planning ahead and doing everything possible to restore confidence, part of which was reassuring people he was "ready and willing to take action when necessary".
The government said there was no rift with Mr King over stimulus action, but shadow chancellor George Osborne said the governor's comments were a vindication of Conservative Party policies. However shadow chancellor George Osborne said the governor's comments were a vindication of Conservative Party policies.
Mr Osborne said: "The governor is sending a very clear warning that this country cannot borrow its way out of debt.Mr Osborne said: "The governor is sending a very clear warning that this country cannot borrow its way out of debt.
"We are already heavily indebted and plans for a second stimulus package, which Gordon Brown has been talking up, should not go ahead.""We are already heavily indebted and plans for a second stimulus package, which Gordon Brown has been talking up, should not go ahead."
Liberal Democrat Treasury spokesman Vince Cable said: "The government has lost all credibility when it comes to fiscal stimuli since it wasted £12.5bn on an ineffective and temporary VAT cut.Liberal Democrat Treasury spokesman Vince Cable said: "The government has lost all credibility when it comes to fiscal stimuli since it wasted £12.5bn on an ineffective and temporary VAT cut.
"Any fiscal stimulus will have to be repaid in the future and so should encourage growth today as well as creating assets for the long term, neither of which the VAT cut has achieved.""Any fiscal stimulus will have to be repaid in the future and so should encourage growth today as well as creating assets for the long term, neither of which the VAT cut has achieved."