PM mocked for 'we saved world' gaffe

Published on Wednesday 10 December 2008 21:05

GORDON Brown was mercilessly mocked yesterday by MPs after a blundering boast that he had "saved the world".

The Prime Minister was defending his economic rescue plan before MPs during Prime Minister's Questions.

A red-faced Mr Brown was shouted down by heckling MPs and was forced to sit down until the Speaker of the Commons could restore order.

The Prime Minister was under attack from David Cameron, the Conservative Party leader, who claimed that the government's 37 billion banking bail-out had "failed".

He faced calls from the Conservatives to adopt the party's plan for a business loan guarantee scheme to inject more credit into struggling firms.

Mr Brown said the Conservatives were on the "wrong side of history", while Mr Cameron said that Mr Brown was on the "wrong side of mathematics".

Mr Cameron said the government's 1 billion loan guarantee scheme covered only 0.2 per cent of business lending in the country.

He cited Bank of England Governor Mervyn King's call for the return of normal rates of lending to the real economy, and asked: "Does the Prime Minister accept that on those terms his recapitalisation has failed and when is he going to change it?"

Mr Brown responded "We not only saved the world ..." before he was shouted down by deafening hoots of derision.

The Prime Minister then tried to correct his wording to say he had "saved the banks".

The Tory leader seized on the mistake, saying: "Well, it's now on the record. He is so busy talking about saving the world, he has forgotten about the businesses of this country."

Downing Street later attempted to play down any embarrassment, insisting that the Prime Minister had not been reflecting on his verbal mistake as he had been too busy focusing on the economy.

But such a blunder will undoubtedly have left Mr Brown furious. His recent performances at Prime Minister's Questions have seen him occasionally trump Mr Cameron.

And this week ministers attempted to press home their belief that their solutions to the economic crisis are the right ones, in contrast to the Conservatives' plans to cut spending.

The gaffe at PMQs managed to overshadow a serious issue – the fate of small firms.

Thousands of companies could face closure in the new year with many credit facilities such as overdrafts and loans due to expire. High street lenders have been reluctant to renew them automatically.

Mr Cameron warned that the bank rescue package was not working and called on the government to adopt the Tory plans for a National Loan Guarantee Scheme.

The Tory leader later launched a draft bill, saying: "With this bill the Conservatives are proposing radical concrete action that would tackle the root cause of the credit crunch and make an immediate difference to thousands of businesses and the families who depend on them.

"The government should act before Christmas to save jobs in the new year."

The draft bill would earmark up to 50 billion in guarantees for new lending to businesses of all sizes. The scheme is wider than the 1 billion small business finance scheme announced in the Pre-Budget Report, which would cover just 0.2 per cent of lending to businesses.

A fee would be imposed on businesses to pay for it, which would be the difference between the interest charged by the lender on the loan and the inter-bank LIBOR rate. It would give taxpayers the same margin on loans as the lender.