Britain freezes £61m of suspected terror assets

Britain has frozen £61m of financial assets suspected of belonging to Afghanistan's Taliban rulers, Chancellor Gordon Brown announced today, while also ruling out an increase in income tax to pay for the Government's additional security spending.

In the latest action since the September 11 terror attacks, on Wednesday, assets were frozen in the London branch of a European bank.

Mr Brown used his speech to Labour's annual conference in Brighton to underline the importance of cutting off the flow of finance to terrorists, what he termed the "lifeblood" of modern terrorism.

Senior Treasury sources said that the UK had implemented fully financial sanctions against Osama bin Laden, the Saudi dissident who is the chief suspect in the attacks in the US, and his Taliban protectors.

They added that the UK's Terrorism Act 2000 implemented the United Nations' convention on suppressing the financing of terrorism.

The UK, they argued, already has one of the most rigorous anti­terrorism regimes in the world, but further measures were being drawn up to strengthen it further.

The new Terrorism Bill would adopt the principles of the Proceeds of Crime Bill so that action could be taken against "clean" money destined for terrorism purposes as well as criminal funds.

The Bill would make provision for the monitoring of bank accounts containing "clean" money which might be used for financing terrorism; impose stricter obligations on banks to report their suspicions; and create powers to freeze accounts from the outset of an investigation.

Britain would also be urging co­ordinated international action against terrorist financing, including ratification of the UN convention on the suppression of such cash flows.

In his speech, Mr Brown declared: "It has now fallen to our generation to bear the burden of defeating international terrorism.

"Ready access to finance is the lifeblood of modern terrorism. No institution, no bank, no financial house anywhere in the world should be harbouring or processing funds for terrorists."

Mr Brown appealed for a united front to combat the funding of terrorism.

"We call upon all nations to ensure that just as there is no safe haven for terrorists, there is no safe hiding place for terrorists' funding."

The Chancellor used his speech to argue that pursuing a stable domestic economic policy was one of the best responses to the terrorists.

"We will show by our actions, in maintaining conditions for stability and growth, that we do not surrender to terrorist threats."

Mr Brown also stressed that the Government's spending plans for the public services would not be revised because of the shock which the terrorist attacks delivered to the global economy.

"To answer directly those who say we will have to cut our spending, let me tell conference and the British people directly our public spending plans are based on cautious assumptions.

"With debt reduced from 44% of national income to 30%, we are well within our fiscal rules.

"So we will hold to our three year spending plans, because they are not only best for social justice but affordable for our country and right for our economy."

At the same time, Mr Brown ruled out any dramatic fiscal loosening to deal with the consequences of the crisis, saying the Government would not "relapse back into the old, irresponsible quick fixes of the past."

In a television interview on Monday morning, the Chancellor confirmed that there would be no increase in income tax, saying: "We promised that in the general election, and we are determined to keep our promises." He also said that the Government's spending on health, education, transport and policing "will go ahead as normal".