'We're grasping towards a new global order'

The PM says the world economy could end up stronger as he reveals he's persuaded the Saudis to bolster an international rescue fund.

Please note 'The Andrew Marr Show' must be credited if any part of this transcript is used.

ANDREW MARR: No end so far to the global financial meltdown, of course. Gordon Brown is focusing his attention, therefore, on global politics he says.

The Gulf States have already bailed out one of our banks, Barclays, and now the Prime Minister wants them to pump billions of pounds into the coffers of the International Monetary Fund, so that it in turn can bail out countries facing economic collapse.

Well I spoke to him earlier this morning from the Saudi capital Riyadh about the reasons for his visit.

You may spot an interesting hint on interest rates as well.

GORDON BROWN: What I'm doing is two things. One is trying to create a stable oil price because it affects every family at home what's happening to gas and electricity bills and what's happening to petrol, and I don't believe we can do that without talking to the oil countries.

And the second thing I'm trying to do is to help prevent contagion going round the world, so we've got problems in one continent, it could move to another continent.

It would make things worse for people here in Britain if that happened and so the Saudis will, I think, contribute like other countries so that we can have a bigger fund worldwide to avoid the contagion, to avoid this spreading to different parts of the world.

And I think these two things are vitally important before the international leaders' meeting on November 15th.

ANDREW MARR: You mentioned petrol prices, fuel prices generally here in Britain. Would it be a fair thing to say that the success or failure of your visit can be judged by what happens to the petrol price in Britain over the next three or six months?

GORDON BROWN: Well I want the petrol retailers to pass through the fall in oil price. I mean the oil price has fallen from $150 to about $65, so it's gone down by more than half in only a few weeks, and I think people driving their car would expect to see that passed through in a bigger way to consumers over the next few weeks. But for the longer term and so we have the stability that everybody wants and we don't have this volatility, you do need the Saudis and the producers to be talking with us and that's why we're having an international conference on this in London on December 19th. And I talked to the King of Saudi Arabia about that yesterday and there's a determination that we have a more stable energy market. Not this volatility, not this really bad time when so many people saw the petrol price go up so quickly and of course it affected gas and electricity bills as well. I want to see more stability as well as a lower price.

ANDREW MARR: So you would like to see a lower price? You do think we need to see a lower price at the petrol pumps, lower prices for fuel bills as well?

GORDON BROWN: Well I can see the oil price going down, as it has, and that following through into petrol price cuts more quickly at the petrol pumps, and I hope we'll see the companies that haven't yet followed the faster route down doing so in the next few days.

ANDREW MARR: Clearly, Prime Minister, the IMF does not have enough money at the moment to bail out all the countries that want to be bailed out. What are the political implications if some of those Central and Eastern European economies actually go down? Do they fall into the Russian orbit as a result?

GORDON BROWN: Well that's the problem you've got to look at. If some of the economies fall, then the fallout is not only for them and the surrounding area, but it will also affect people in Britain. There'll be less stability in the financial system. And that's why I am so determined that while there are national things that we are doing like cold weather payments and help with mortgages, you've got to do the international change that is necessary and that means a stronger International Monetary Fund facility, bringing in some of the countries like China and the Arab states that have not been fully brought in before. And I think we are grasping towards, as we work on this, a new global order where there will be far better global coordination in future, people will work together to solve common problems and people will recognise that the world economy coming out of this could be stronger in the years to come if we have this level of global international cooperation.

ANDREW MARR: There's some confusion at the moment about your attitude to investment at home as we enter recession. Are you planning to bring forward current capital projects that haven't been, haven't started yet? Are you planning to spend extra money on big projects to mop up unemployment, or is this really about the cost of unemployment with lower tax bills and so on?

GORDON BROWN: We've already brought forward housing projects and that is something that was announced a few weeks ago. We've already brought forward - and this was a levy that was paid by the utilities - insulation and energy saving projects, so there is more capital investment going into this. I think the issue for every country - and I've been talking to America, I've been talking to Germany, to France, to Australia, all the countries - they know that we've got to be more active in helping people through these difficult times and every country is planning to invest more to help people come through these times. We're doing it also to help people come through these difficult times fairly and we benefit from a position which is a better position than many of the other major economies. We've got lower national debt, so we are able to make that investment because our debt has been so much lower in previous years.

ANDREW MARR: And yet we have very high levels of public spending already and many people here, not just the Conservatives, are saying that this is going to be the equivalent of for instance about 4p on income tax sooner or later.

GORDON BROWN: I think what every country is doing is recognising that you need to act to get the economy moving, so the first priority is to get the economy moving and that is the action that we are taking. As I say to you, we have come from a position where national debt is a lot lower than other countries, so France, Germany, Italy, Japan, America, they've all got higher levels of national debt than we have, so we are in a position to make this investment. And if you like, by getting debt down over the last ten years we've made ourselves in a better prepared position to deal with difficulties such as this. And of course we've also got low interest rates compared with previous world downturns, so the building blocks for a recovery are there and in place. The important thing is to get the banks now lending to businesses and to families.

ANDREW MARR: Do you accept that for an awful lot of people looking at the world, not just looking at Britain, interest rates in this country still appear to be remarkably high given the severity of what the country's facing?

GORDON BROWN: What people have been worried about over the last few months is, as you probably know, is that the oil price was getting out of control - it was $150 for a bit - and that food prices have gone up, so inflation was hitting the system. And now that inflation is brought under control we are going to see, as we have seen, two cuts in interest rates, and I believe that the trend round the world - I can't speculate about what the Bank of England will do because they're independent - but I believe the trend around the world is to respond to the falling oil price and the falling food prices that we're seeing at the moment.

ANDREW MARR: Well of course you can't instruct them, as you've said, but you must be hoping that they're going to go down considerably further?

GORDON BROWN: Well I think what we're seeing round the world is an ability also to come together. We had a coordinated interest rate cut a few weeks ago. We've seen coordinated action on bringing the banks back into action by capitalising them

ANDREW MARR: So we might see more of that?

GORDON BROWN: we've got coordinated action that we will � Well that's what this November 15th's meeting is about.

ANDREW MARR: Ah!

GORDON BROWN: You know perhaps we've led the way in recapitalising the banks. The Bank of England was involved directly in agreeing the coordinated cut in interest rates. I see the world moving closer together to work to solve these problems, and the reason I'm here is to make sure that all countries in the world - those with big resources like the Gulf States, those with big surpluses like China - are working with Europe and America to find a solution to these problems which are global - started in America but have spread to the rest of the world - and we need to work together in cooperation to solve them. Now if I can play my part in bringing countries together, so that we have common action and coordinated responses to what's wrong, then I think we'll get through this downturn a lot quicker.

ANDREW MARR: Prime Minister, we've had two incidents in the last couple of days of more information being lost - an extremely sensitive memory stick being left in a car park and then more or less simultaneously one of your ministers, James Purnell, leaving some papers on a train in his red box. Why does this kind of thing keep happening and have you had a word with Mr Purnell?

GORDON BROWN: Well there are very strict rules about information being outside buildings and these have to be followed. And of course while I've not had a chance to talk to James Purnell, he'll be as concerned as me that the rules for the future ensure that these things can't happen. We had a private company that had information and that is a private company that will have to explain itself to government. We are determined to enforce the strict rules that we've laid down about information not being liable to be either lost or stolen and this recent case with a private company where information about individuals has been lost makes me even more determined that we will root out this problem of leaving things around. Now I think Gus O'Donnell, the Cabinet Secretary, is sending round new instructions.

ANDREW MARR: And, finally, it's now been several weeks since we were told there was a deal to sort out HBOS and yet it all seems to be reopening again. There's another European move to help the bank, might save more jobs. Do you welcome this or do you see this as an embarrassment after so long?

GORDON BROWN: I think the important thing is that people are free to bid for HBOS, but we've got to recognise where it was. Where it was was in a position where there was only one choice about rescuing it. Only one company had come forward at that time. We have actually invested �17 billion into buying shares in the new entity and I do think people have got to remember that if we had not acted a few weeks ago, HBOS would have fallen altogether. Of course we'll look at every offer and of course that's part of the process of shareholders sorting out what the future is, but let's remember the problems that HBOS had and why we had to intervene with so much money in the first place.

ANDREW MARR: Prime Minister, thank you for joining us.

INTERVIEW ENDS

Please note "The Andrew Marr Show" must be credited if any part of this transcript is used.

NB: This transcript was typed from a recording and not copied from an original script.

Because of the possibility of mis-hearing and the difficulty, in some cases, of identifying individual speakers, the BBC cannot vouch for its accuracy

Your comments

Disclaimer: The BBC may edit your comments and cannot guarantee that all emails will be published.

E-mail this to a friend

Printable version