Brown says UK faces test in 'dangerous' economic times

|PIC1|Britain faces a testing time with the world economy in a "difficult and dangerous situation", Prime Minister Gordon Brown said, promising not to shirk unpopular, long-term decisions to ensure stability.

In an interview with The Observer, Brown said 2008 was a "decisive" year for his government, with tough choices to be made on infrastructure, transport and nuclear power.

Brown, six months into his premiership after succeeding Tony Blair, is trailing the Conservative Party in polls following a string of setbacks late last year. Brown does not have to call an election until 2010.

"This is the year when we will make and implement all the major long-term decisions that are going to safeguard and equip Britain properly for the future," Brown told The Observer in the interview published late on Saturday.

His comments come ahead of an announcement in the next few days when the government is expected to give the go-ahead for a new generation of nuclear power stations, despite opposition from environmentalists and some members of Brown's Labour Party.

"If you look at the oil price today, people will expect us to have a strategy not only to have safe energy but to have reasonably priced energy, and to not be wholly dependent on other countries," Brown said, suggesting support for nuclear.

The government also has to take decisions on major projects such as a third runway for Heathrow airport and the Crossrail train link across the capital, as well as on building three million homes over the next few years, Brown said.

"Obviously some of these decisions are controversial. And obviously some of them are about long-term commitments that you've got to make about investment and the way you use funds when you can have short term consumption in place of it," he added.

Such long-term decisions were essential to equip Britain to compete with emerging economic giants like China and India.

Brown said decisions taken by Labour since it took power more than a decade ago had helped to keep inflation low, leaving Britain well placed to endure economic turmoil stemming from the credit crunch.

"This is a difficult and dangerous situation for the world economy," he said. "But ... I also believe that Britain is better placed than most to withstand the global turbulence."

Brown, who served as finance minister for 10 years under Blair, defended his government's decision to keep a tight rein on public sector pay increases, saying this had given the Bank of England flexibility on interest rates.

But Brown recognised many of the future decisions would not be popular and accused opposition parties of opportunism for not supporting the government on some of the tough choices.