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British Prime Minister Gordon Brown leaves 10 Downing Street in London on Oct. 14, 2009. (LEON NEAL)
British Prime Minister Gordon Brown leaves 10 Downing Street in London on Oct. 14, 2009. (LEON NEAL)

Andrew Steele

Brown's sales pitch Add to ...

The Mother Parliament is enduring one of its more awful periods right now, as an endless expense scandal plays out in Britain.

Despite this crushing blow to the public's trust in its MPs, the level of debate in the Britain is still enviably sophisticated.

A great example came as Canadians were celebrating Thanksgiving.

More Related to this Story

British Prime Minister Gordon Brown laid out an interesting policy and rhetorical line in a major speech in the financial centre of the City of London.

Brown's thrust is that the recovery is beginning but fragile. To foster growth, the government will issue detailed plans on tax reform, clamping down on tax avoidance and selling government assets. At the same time, the Labour government will protect and advance investments in education and training to prepare British workers for the job opportunities that will come with recovery.

The speech itself is worth reading. Brown lays out the decisions that faced governments around the world, and the choice to go beyond the "automatic stabilizers" with extraordinary actions like bank nationalization, massive stimulus spending on the order of 5 per cent of global GDP and the creation of a robust G20 as a forum for world economic cooperation.

But what is really fascinating is Brown's strategy. Like all political leaders facing re-election, global forums are seen as opportunities for domestic political victories.

Seen as a stumblebum at home, he is still a serious player on the international stage. As such, he is attempting to elevate himself out of the morass that is Parliament and spend the next year in the company of Barack Obama and Nicolas Sarkozy and Angela Merkel setting a "growth strategy for the world." As the host of the next G20 in Scotland, Brown is well positioned to be at the epicenter of this debate.

Second, he wants to push a massive change to international bank regulation. There will be sharp resistance to this push from some quarters, and Brown needs to take great care to walk a line between increased regulation and watered down sovereignty in economic matters.

Finally, and most dramatic, is Brown's move to sell sixteen billion pounds ($26-billion) in assets.

This dovetails with an existing deficit reduction strategy, which is basically spend at a slower rate and let growth pick up. Now it enjoys the added logic of lowering interest payments with the cash from new owners for some fixed assets like the Chunnel.

The result is a potent political attack summarized in these two paragraphs:

"So yes, there is a fundamental divide in British politics at the moment. Some people would withdraw the fiscal stimulus now, at a time when the economy is still in difficulty. Some people would stop quantitative easing today and that would imperil the recovery. Some people would fail to invest in the productive sector of our economy so we are denied a future in high skilled and knowledge­based industries. And some people would withdraw the cooperation that is necessary with our European partners and with the rest of the world to enable the only way that the global economy can function in the future, the international cooperation is necessary.

I will fight over the next few months for what I believe. I believe we've been proved right by what we've done over the last year to restructure the banking system, to make sure there is international cooperation and to deal with the problem that arises from the lack of stimulus in the economy by taking fiscal and monetary action. And I'm absolutely sure that over the next year the pursuit of growth in the context of a deficit reduction plan that is sensible and is properly timed and, at the same time, the pursuit of an investment­led and export­led strategy alongside international cooperation is the only way that we can avoid a decade where growth would be low and unemployment high. I'm an optimist. I believe that working together we can make the difference."

Basically, Brown is using the asset sales to pay for slightly higher expenditure growth than his Conservative opponents can endorse. Then he is free to argue that their plan is both hard-hearted and soft-headed, risking the recovery while increasing unemployment.

Brown's argument is that the Tory demand to cut public spending now to control the deficit is not only bad for you in the short-term, risking an increase in unemployment, but they are risking a " Japanese-style decade-long recession."

It's an interesting argument, and one that has the potential to be a wedge for Brown to get his party and his government back on track.

It also provides a path for Michael Ignatieff to differentiate himself from Stephen Harper, although Mr. Harper has been more than willing to put assets on the block before and may in fact use this strategy himself.



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