UK's Brown paves way for election with budget date

Britain's economic recovery remains fragile, Prime Minister Gordon Brown warned Wednesday, as he paved the way for a national election by announcing the government's budget would be published in two weeks.

In a pre-election swipe at the main opposition Conservative Party, Brown said it was too early to withdraw support for the struggling economy and offered a glimpse of the ruling Labour Party's plans by announcing a pay freeze for senior public employees.

Brown's speech in London signaled a big shift in gears in unofficial campaigning for a general election that must by held by early June at the latest.

Analysts said the announcement of the budget date as March 24 indicated that the rumored election date of May 6, favored because it allows the combination of local and national polls, was the most likely.

The state of the British economy is expected to be a major factor in the campaign. It emerged hesitantly from an 18-month long downturn at the end of last year, but gross domestic product growth remains weak and many fear a "double dip" recession.

"We dare not risk the recovery," Brown said on Wednesday. "For our task above all else is to preserve and expand the jobs — and lift the standards of life — of the British people. We are weathering the storm, now is no time to turn back."

"We have got through this storm together but there are still substantial risks ahead. There will be bumps in the road," he added.

Tackling the country's burgeoning debt is a key point of difference in what is shaping up to be a closely fought election between the Conservatives and Labour.

Economists warn that Britain is on course to borrow the equivalent of 12.8 percent of gross domestic product in 2009/10 — exceeding the 12.7 percent forecast in crisis-hit Greece and far above the average 6 percent for Europe.

Conservative Treasury spokesman George Osborne has pledged to announce a new budget within weeks if his party is elected, which will include spending cuts from the summer.

Brown said Wednesday that the government remains committed to halving the deficit within four years from a record peak of 178 billion pounds ($265 billion) this year.

But he is wary of moving too soon, warning that immediate, major cuts to stimulus, via less spending and higher taxes, could send Britain into a dreaded double-dip recession.

"Although the economy is now growing, recovery is still in its early stages — and remains very fragile," Brown said. "There will be many months ahead of conflicting statistics, false hopes and mixed signals."

The pay freeze for senior civil and military staff, judges, senior health service managers, doctors and dentists follows a freeze imposed on ministers' salaries announced in December.

Brown said those measures would save the government money immediately and some 3 billion pounds by 2013-2014.

The British leader is attempting to win back support for his guidance of the domestic economy.

Viewed early in the global economic crisis as a decisive leader on the world stage and at home, many analysts believe Brown squandered an opportunity to call an early election in the summer of 2008.

His stock has fallen since then, along with the British economy's prospects, allowing the Conservative Party to pull ahead in the polls.

But the latest Ipsos Mori poll for the Telegraph newspaper, published Feb. 26, puts the Conservatives at 37 percent, just five percentage points ahead of Labour — a drastic pullback from the 19 point lead recorded around this time last year.

Offering a likely taste of his election platform, Brown presented himself as an unpolished, but experienced, economic steward.

"For better or for worse, what you see with me is what you get," he said.

Brown derided his chief rival, opposition Conservative Party leader David Cameron, over his hesistancy on the economic crisis.

Cameron's party initially opposed the nationalization of ailing banks, and in recent weeks has sent out mixed messages on when exactly it would start work on cutting the deficit.

Senior opposition Conservative Party lawmaker William Hague said a new Conservative government would be a chance "to send the signal far and wide that Britain is once again open for business."

Fitch Rating's agency warned on Tuesday that Britain's credit profile has deteriorated in recent months and that the government's plans fall far short of what is needed. Brian Coulton, Fitch's head of Europe, Middle East and Africa sovereign ratings, said he was "uncomfortable" with the country's current fiscal program and wants to see "more credible" plans over this year.

"Gordon Brown is right — the economy is at a crossroads," Hague said. "We could continue with five more years of his debt, waste and taxes. We know where that would lead — just yesterday an international credit rating agency warned that Labour's plans would result in the loss of our credit rating."

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