Keep on spending, Brown urges governments

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Gordon Brown said yesterday that Britain could protect vital public services from cuts by "going for growth" as he urged the world's major economies not to take their foot off the spending pedal.

Speaking at an Anglo-French summit in Evian, the Prime Minister said: "If we can get growth, if we can get unemployment down, if we can keep interest rates and inflation down, then there is scope to do the things we want to do, and that is to get money to the frontline services."

But Peter Hain, the Welsh Secretary, became the latest member of the Cabinet to raise the prospect of spending cuts after the general election. Although aides insisted he was not contradicting Mr Brown, Mr Hain said: "Once we emerge from recession, it is fair to state that a slower growth of public spending will be the best strategy. The next 10 years cannot be the same as Labour's past 10 years of record investment in our schools and hospitals spending."

He added: "We will need patience as well as prudence. It will mean being tough on priorities and really going hard for efficiency. But such sensible Labour prudence over the medium term is quite different from Tory slash-and-burn starting right now."

Downing Street and the Treasury sought to calm trade union fears of a pay freeze for six million public sector workers. The Chancellor declined to rule out such a move on Sunday, but today Number 10 said the Government would not dismantle the three-year deals for groups including teachers.

Mr Brown is worried that economic recovery in Britain could stall unless other nations, particularly European countries, continue to take action to stimulate a return to growth. He will take his "go for growth" message to the G8 summit of the world's leading economies in Italy starting on Wednesday.

Yesterday the French President Nicolas Sarkozy echoed the Prime Minister's comments about the need to ensure a return to growth as the two leaders heaped praise on each other. "Of course we need to combat indebtedness and try to restrain deficit, but we will only achieve that if we restore growth and if we restore our economies to health," M Sarkozy said. Mr Brown told his host: "President Sarkozy, mon ami, you are truly a force of nature."

Britain promised £15m to tighten border controls in French ports where hundreds of would-be migrants gather in the hope of smuggling themselves into the UK. Searches of vehicles and goods heading for Britain will be stepped up. In return, M Sarkozy pledged to remove more illegal immigrants to their home countries.

The two leaders agreed to call for a March 2010 deadline for sanctions against tax havens that fail to come up to international standards of openness. "The world should be in no doubt that the writing is on the wall for tax havens," said Mr Brown. "Tax transparency, full exchange of tax information and reducing tax avoidance are crucial for the health of the global economy."