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   Web Issue 3499 July 6 2009   
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Oil too volatile to underpin independence, insists Brown
TORCUIL CRICHTON, Chief UK political correspondentOctober 27 2008

Gordon Brown took another swipe at the Scottish Government yesterday, saying the SNP was banking on the "volatile" oil industry to underpin the argument for independence.

Arguing that Britain is better placed to withstand the global economic crisis than other Western economies, The Prime Minister said the fluctuating nature of the oil market was not the basis on which to build economic stability.

"You cannot build the future of the whole of the United Kingdom, people's pensions, the future of Scotland, people's savings and people's jobs, on a volatile commodity," said Mr Brown in an interview with BBC Scotland.

Mr Brown will claim today that he will see Britain through the global economic crisis by investing in skills and training, increasing public borrowing and reforming international banking rules.

His recipe for recovery, which he will outline in a speech at Imperial College, London, flies in the face of a dire warning from a group of senior economists who have branded the government's plan to spend its way out of the looming recession as "misguided and discredited".

Chancellor Alistair Darling's proposal to bring forward spending on major state- funded projects to kick-start recovery has been keenly defended by Mr Brown despite a sharp rise in public-sector debt.

But in a letter to the Sunday Telegraph, the newspaper in which the Chancellor revealed his plans last week, 16 economists attacked the policy.

The signatories wrote: "We would like to dissent from the attempt to use a public works programme to spend the country's way out of recession.

"It is misguided for the government to believe that it knows how much specific sectors of the economy need to shrink and which will shrink too rapidly' in a recession."

With the government under fire over its preparedness for the looming recession, Mr Brown is expected to say today that a temporary increase in borrowing is right to support the economy.

"We will and can allow borrowing to rise to help restore demand and to come to the aid of workers, businesses and homeowners," Mr Brown will say.

The Prime Minister will also call on banks to start lending again and say that further reform of the financial system will be necessary.

Mr Brown and Alistair Darling have been criticised by opposition parties for not instructing banks the government has bailed out to do more to protect jobs and keep small business afloat.

SNP MSP Alex Neil has accused the Chancellor and Prime Minister of "abandoning" Scottish jobs after Mr Brown said that assurances over jobs were "a matter for companies to look at".

In an interview, Mr Brown gave a coded warning to institutions, including Royal Bank of Scotland, over future trading.

Turning to the proposed takeover of Halifax Bank of Scotland by Lloyds TSB, Mr Brown indicated it was not yet a certainty. He said: "It may be in the next few days someone will come and say they can afford to buy HBOS and leave it independent but until now nobody has come forward."


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