PM: I won't apologise for economic crisis

Brown resists pressure from close allies to sound more contrite note
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Indy Politics

Gordon Brown has rejected calls from close allies to apologise for playing any part in triggering Britain's slide into recession when he addresses the two houses of Congress today. The Prime Minister's stance puts him at odds with the Chancellor, Alistair Darling, who has privately urged him to admit a share of the blame. Mr Darling said yesterday that the Government and City regulators should accept "our collective responsibility" and to show "humility" about the mistakes made.

Some cabinet ministers and Brown aides have been arguing that if Mr Brown admitted some responsibility for the banks crisis, coupled with an apology, he would win plaudits from the public and support for his financial rescue plan. But the Prime Minister has strongly rejected their advice, insisting he has no reason to deliver a public mea culpa because the seeds of Britain's economic crisis were sown in the sub-prime mortgage market in the United States.

The Chancellor's intervention, in a newspaper interview, could revive tensions between him and the Prime Minister. Mr Brown was angry last September when Mr Darling's remarks that Britain faced its worst downturn for "arguably 60 years" overshadowed his autumn fightback.

Other ministers are showing more contrition than Mr Brown. The Schools Secretary, Ed Balls, his former chief economic adviser, said that "in retrospect, it is clear we were nowhere near tough enough" on regulating the City. John Kingman, a senior Treasury official who chaired the joint Treasury, Bank of England and Financial Services Authority (Tripartite) committee set up by Mr Brown in 1997, conceded yesterday the system had not been a "full success".

He told MPs: "I am certainly not going to say that the Tripartite successfully identified every problem that might arise. It clearly did not. I would say it achieved a lot. Was it a full success? Plainly not."

David Cameron, the Tory leader, has repeatedly asked Mr Brown to apologise for mistakes when he was both Chancellor and Prime Minister. He also faced a series of similar challenges from journalists at his monthly press conference. Mr Brown insists he can say sorry – pointing to his admission that the abolition of the 10p rate of income tax was a mistake – but maintains that he has no cause to make a similar apology over the recession. He believes he would be playing into the hands of journalists, and footage of him saying sorry would be played endlessly on television.

Mr Brown will use today's speech to Congress to deliver a plea against protectionism, arguing that it is in the long-term interests of the US economy to build strong export markets abroad.

The Prime Minister has refused to predict when worldwide economic growth would resume. But he predicted recovery would return "with some speed" if the world's leading industrial nations worked together to instill new confidence in the banking system. He told a US radio station that countries from Europe to China to "our friends" in America shared a "general understanding" that nations needed to act together to produce a "fiscal stimulus for the world economy", and to sideline countries that failed to regulate their banking systems adequately.

George Osborne, the shadow Chancellor, said last night: "When the Chancellor and the Prime Minister are openly divided over the causes of recession and their responsibility for the mess the British economy is in, what confidence can anyone have that they can lead us into a recovery? Gordon Brown is deeply implicated in the mistakes of the past – and even if he won't apologise for them he can't escape them."

As the calls for an apology mount, Mr Brown has told friends that this recession is unlike previous downturns which were domestic in origin, caused by governments which allowed inflation to run out of control. Although he admits regulation of the banking system was inadequate, he believes there was a similar weakness throughout the West.

He also denies that British levels of indebtedness rose any higher than other industrialised nations. He dismisses suggestions that high levels of public spending contributed to the crash. The Prime Minister insists that restoring confidence to the people, many of whom have more cash in their pockets as a result of interest rate cuts, is the key to finding a route out of recession.