Brown searches in vain for hope

Feb 12 2009 By Joe Churcher, The Journal

GORDON Brown rejected Tory charges of "incompetence and arrogance" yesterday as a slew of negative revelations underlined the scale of Britain’s financial crisis.

As unemployment soared to its highest level for a decade, the Governor of the Bank of England warned the country was in "deep recession" and facing an even worse slump than first feared.

The grim forecast came as the former head of HBOS quit as a top City watchdog over allegations – denied – that he sacked a senior executive who warned the bank was heading for problems several years ago.

And while the present heads of the country’s major banks were being grilled by MPs, fraud investigators revealed that they were probing major companies – including banks – linked to the collapse of the financial industry.

"The Government’s economic policy is in disarray," shadow chancellor George Osborne said.

"One of the Prime Minister’s most senior advisers resigned just before PMQs, the Governor of the Bank of England says the recession is going to be four times worse than the Treasury predicted and almost two million people are paying the price for Labour’s mistakes in the lengthening unemployment queue.

"The country wants leadership and they’re not getting it at the moment."

Stark figures showed the jobless total had hit 1.97 million with the number claiming Jobseeker’s Allowance up for the 12th month in a row by 73,800 in January to 1.23 million, the highest since the summer of 1999.

Hundreds more job losses were announced, with business leaders warning unemployment was now on a "relentless rise" towards three million as the Prime Minister hosted the first meeting of a group designed to boost jobs.

He told business leaders he was convinced they could "make a difference to the employment opportunities and success of the economy" – and MPs that every job lost was a cause for "sadness".