By Robert Hutton...www.bloomberg.com
Sept. 19 (Bloomberg) -- Prime Minister Gordon Brown said the U.K. has the ability to increase government borrowing to support the economy, his latest effort to show he is taking steps to counter the slowdown.
Brown's words come on the eve of the Labour Party's annual conference and follow weeks of sniping from lawmakers calling for him to quit. Britain's budget deficit is running ahead of forecasts and may breach his own borrowing limits as economic growth saps tax receipts.
``In days of higher growth we also took decisions to reduce the national debt to give us the flexibility to increase borrowing in these hard times,'' the prime minister wrote in an article in tomorrow's Guardian newspaper.
While Brown later pledges his fiscal policy will ``remain sound,'' his words may signal a shift from rules, introduced when he was finance minister in 1997, of borrowing only for capital investment and keeping debt below 40 percent of gross domestic product. Falling tax receipts this week saw the U.K. budget deficit widen to its largest level since records began in 1993.
He went on to attack the opposition Conservatives for their ``ideological objection to higher borrowing'' which, he said, combined with a pledge to cut inheritance taxes, ``would have required them to scale back public services.''
A YouGov Plc poll in the Daily Telegraph newspaper showed Labour had the support of 24 percent of adults, behind the conservatives at 44 percent. Two-thirds of the 2,227 adults surveyed Sept. 17-19 agreed Brown had ``blown it'' as prime minister and offered ``a lot of tough sounding words but little positive action.''
So far 13 Labour lawmakers, including one minister in Brown's government, have called on the prime minister to quit. While he doesn't directly address their criticisms in his newspaper article, Brown urges his party, which meets in Manchester for the start of its annual conference this weekend, to ``be concentrated on the needs of the British people, whose paramount concern is how this week's financial events will impact on their families.''
To contact the reporter on this story: Robert Hutton in London at email@example.com.
Last Updated: September 19, 2008 18:00 EDT