> Brown to create 100,000 jobs

Britain’s Prime Minister Gordon Brown yesterday unveiled ambitious plans for a 1930s American-style programme of public works to ease the pain of recession by creating up to 100,000 jobs.

School repairs, new rail links, hospital projects and plans to usher in a new digital age by investing in superfast broadband will be used to keep unemployment down. The plans will also be used to tackle climate change, by means of investments in eco-friendly projects such as electric cars and wind and wave power that would also create jobs.

Speaking exclusively to the Observer , the prime minister also pledged action within weeks to kickstart bank lending in an attempt to save existing jobs.

Brown is studying a scheme pioneered by Nissan to avoid redundancies in manufacturing, which would see ailing firms given government funding to move staff on to part-time working and use the remaining time for training.

His promise to use public money not only to create short-term jobs, but also to build a low-carbon economy for the future, will be seen as a modern reworking of Roosevelt’s New Deal - a massive programme of public works, such as dams and roads, to help America recover from the Great Depression.

Brown even claimed his green plans would be bigger than Barack Obama’s planned multi-billion-dollar “Green New Deal”, relative to the size of Britain’s economy.

In a wide-ranging new year interview at his family home in Scotland, the prime minister also:

•  ruled out an early second recapitalisation of the banks;

•  signalled opposition to deploying more British troops in Afghanistan;

•  proclaimed a “historic opportunity” for an international deal on climate change.

He also revealed his own new year’s resolution – to take up running.

However, his biggest priority will be to create and save jobs, amid predictions that by 2010 one in 10 Britons will be unemployed. Retailers are expected to respond to a disappointing December by shedding staff this year.

“I want to show how we will be able, through public investments and public works, to create probably 100,000 additional jobs over the next period of time in our capital investment programme - schools, hospitals, environmental work and infrastructure, transport,” Brown said. “We are not going to stand by and allow nothing to be done when people are facing difficulties.” The programme will be funded by new money drawn partly from reserves.

One priority will be jobs in digital industries, while 30,000 jobs will be in school repairs in an effort to help private construction firms ravaged by the downturn.

Brown suggested infrastructure such as high-speed broadband could be the modern equivalent of FDR’s programme: “When we talk about the roads and the bridges and the railways that were built in previous times – and those were anti-recession measures taken to help people through difficult times – you could [by comparison] talk about the digital infrastructure and that form of communications revolution at a period when we want to stimulate the economy. It’s a very important thing.”

He is also studying 10 specific projects on alternative energy sources. He denied that the recession would see green issues shelved, adding: “Rather than pushing the environment into a lower order of priority, the environment is part of the solution.”

Brown, who will hold a jobs summit next Monday, promised new measures to help firms with good long-term prospects to obtain credit: “Clearly we have banks that were willing to take large numbers of risks a year or two ago and people are now averse to risk, so we have got to create the conditions in which it’s possible for banks to resume lending.”

Asked if that could involve more recapitalisation with public money, he said: “That is not the first thing on any agenda. The more important thing is getting the resumption of lending by other means.” The government will also shortly unveil a payment holiday scheme for people struggling with their mortgages after redundancy. Brown insisted that they wanted to help “everybody who is genuinely trying to pay their mortgage back”, but admitted that lenders would ultimately decide eligibility.

Other key priorities for 2009 include an international agreement to reduce carbon emissions. Brown said Obama’s election would help, but that getting India and China on board was critical.

However, if Obama asks for more British troops for a surge in Afghanistan he may be disappointed, with the prime minister insisting that the priorities were to strengthen Afghan governance and involve Pakistan in fighting terrorism.

“The first question everybody starts by is saying ‘What about the numbers?’, but actually the first question is purpose and objectives and how we can achieve them,” he said. “We have increased our numbers in the past few weeks; we are the second-largest force in Afghanistan; we are making a very big contribution.”

Brown also dismissed Tory warnings of growing resentment of public sector workers’ gold-plated pensions, insisting there had been “significant savings”. – The Observer