Brown calls for immediate action on economy

GOVERNMENT action to bring about economic recovery was urgent and should not have to wait until the Chancellor of the Exchequer made his Autumn Statement to the Commons on 12 November, Gordon Brown, Labour's economics spokesman, said yesterday.

The shadow Chancellor told a Westminster meeting that 200,000 jobs were likely to be lost by Christmas. 'Manufacturing output has fallen by more than 7 per cent in the recession, industrial production by more than 5 per cent, Gross Domestic Product by 4 per cent, manufacturing investment by more than 20 per cent - making a recession that started earlier, and has lasted longer than any other European Community economy.

'And it is quite clear, not only that the recession is lasting longer than ministers have promised, but also that with investment still falling, the capacity of British industry is fast becoming too small to benefit from any recovery.

'The risk is that the recession crisis will feed directly into a new balance of payments crisis.'

Mr Brown said the clamour for a change of government policy had been coming thick and fast from all sections of business and industry, and from all parts of the country in recent weeks.

'The problem is not just that the Government has been unable to secure a recovery, but that it has no strategy for recovery.'

The Government needed an employment creation programme; an industrial policy; a commitment to public investment; and a co-ordinated EC policy of expansion. Mr Brown said: 'The Government must get back to work so that British industry can get back to work . . . But the national recovery programme we now need requires action urgently and we should not have to wait until November 12's Autumn Statement.'

In a speech at Strathclyde University, Glasgow, last night, John Smith, the Labour leader, concentrated his attack on the 'arrogance of power' shown by the initial government decision to allow the closure of 31 pits.

Calling for a fundamental reform of the system of democratic accountability, Mr Smith said that John Major was following the path trodden by Margaret Thatcher before him. 'A pattern of clawing power back to the centre, of stifling the voice of dissent, of closing down the channels of open and accountable government.

'It is an irony that those who talked about rolling back the state have done more than anyone else in our peacetime history to increase the powers and instruments of central government.'

Mr Smith said: 'Across Scotland, across Britain, people are losing faith in our democracy. This is largely because government has become so remote. People feel increasingly isolated and powerless. Disillusionment and cynicism spread.'

It was not only a Scottish parliament that was required, but also greater power for the regions of the United Kingdom; fitting in with the increasingly regional focus of EC policy. As the party of constitutional reform, it was up to Labour to generate greater devolution and create structures that 'bow to the people, not the other way round'.