Brown hails world economy deal

Gordon Brown has hailed a "historic" agreement by world leaders to act together to reverse the devastating global economic slump.

Following crisis talks in Washington by the G20 group of leading nations, the prime minister claimed victory in his campaign for co-ordinated tax cuts around the world to kick-start their ailing economies.

At a final press conference at the British embassy with chancellor Alistair Darling, he said that the assembled leaders had put in place a "route map" to economic recovery.

The final communique called on governments to use fiscal measures - tax cuts and spending increases - to stimulate their economies to "rapid effect".

It did add the caveat that countries should implement such measures as appropriate to their domestic circumstances.

However, Brown said that he expected other nations to be coming forward with their own "fiscal stimulus" packages within the coming weeks.

"This is not about the abstract language of communiques, but real issues that affect people's daily lives," he said.

"By the actions we take, savings are safe, people will be able to keep their jobs, they will not lose their homes in all or our countries.

"These are extraordinary times and they require extraordinary measures.

The prime minister also welcomed a commitment by the G20 to "strive" to put in place a timetable for agreement on a new world trade deal by the end of the year.

In the meantime, they agreed a 12-month moratorium on any new protectionist measures.

However, detailed agreements on the reform of the world financial system - including global regulation of the biggest banks and an overhaul of the way the International Monetary Fund (IMF) operates - will have to wait a further G20 summit in the spring of next year.

By then, Britain will hold the chairmanship of the group and Brown said that the meeting could take place in London.

Whilst the prime minister insisted that they were on the "road to a new Bretton Woods" - he said that the main focus of this meeting was on the fiscal measures.

China, Japan, Germany and Australia are among the countries which have already announced measures, while Darling will set out the UK's plans in the pre-Budget report on November 24.

Brown said that it was also "very much in line" with the thinking of US president-elect Barack Obama, even though he did not take part in the talks.

He said: "There is a clear determination on the part of world leaders in every continent to take the necessary action to move our economy forward in this difficult period," Mr Brown said.

"I believe that you will see in the next few weeks significant further announcements by a number of countries.

"I believe that world leaders are convinced that they must take that action and take that action soon."

Brown's proposals did come under fire at home from shadow chancellor George Osborne who warned that Britain's public finances were now so weak they risked a run on the pound.

His comments drew a scathing response from the prime minister who said: "I now regret the partisan talk from the opposition.

"At a time when nations are coming together all over the world to deal with these problems, I think people are looking to politicians to be responsible and to show leadership."