'Lighten up' and trust your Chancellor, Clinton tells UK

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Gordon Brown's ambition to be the next Prime Minister has been boosted by Bill Clinton, who praised his handling of the British economy after both men crossed a union picket line to attend a conference at the Guildhall in London.

The former US President told his British audience to "lighten up" because, whatever their criticisms of Labour, the UK is better governed than America. He even joked about the Blair-Brown rivalry, saying both men deserve equal respect.

He told yesterday's conference, organised by the John Smith Foundation, set up in memory of the ex-Labour leader: "Progressive politics is about avoiding false choices. You don't have to choose between the environment and the economy.

"You don't have to choose between success at work and success at home; you don't have to choose between business and workers. It's all about avoiding false choices. That's why I'm a friend of Tony Blair and Gordon Brown."

But his remarks coincided with a new phase in the brittle relationship between Mr Brown and Mr Blair, which has been thrown in to its latest crisis by the Prime Minister's remarks in Australia, where he said it might have been a mistake to say that he would leave office before the next election.

The Deputy Prime Minister, John Prescott, will come under pressure today to secure a date for a changeover in Downing Street. He will meet senior backbench MPs, who will echo the remarks made by Jon Trickett at the Labour MPs' weekly meeting that the Government is being weakened by confusion over Mr Blair's departure date.

"It was the first crack in the wall of silence on this issue," said one officer of Labour's backbenches. "The feeling is that Tony cannot go on until 2008. We are paralysed while Tony remains in charge."

In his speech at the Guildhall, Mr Clinton praised Mr Brown for what he called "your wondrous leadership of the economy and the Treasury, and your continued effort to find responses to the challenges of globalisation at home and abroad."

He added: "I've seen people say Labour is getting a bit long in the tooth. But if you live where I live and you look across the Atlantic, it does not look that way. You should see yourselves as others do.

"And ... I see a strong economy, fiscal responsibility, investment and low unemployment where the reverse is true in my country. I see you committed to fight global warming, in stark contrast to the policies in the US. So you should lighten up: you're doing really well. And if you went across the Atlantic and saw what was happening there, you'd think you were doing pretty well."

His comments were seen by Mr Brown's supporters as evidence that the Chancellor is as much an international figure as Mr Blair. Alarm bells rang in the Brown camp over the weekend when Mr Blair seemed to be implying that he was going back on his promise to stand down before the next election.

Blair allies, such as the former Cabinet ministers Alan Milburn and Stephen Byers, have started challenging Mr Brown on issues that they say he will have to confront, either as Chancellor or Prime Minister, such as tax rates for the very low paid.

Mr Milburn hinted that Mr Brown should cut the 10p tax rate introduced by Labour in 1999, "so that we can spring more people from the poverty trap."