Britain's Brown seeks redemption at debate after gaffe

BIRMINGHAM, England -- British Prime Minister Gordon Brown went for broke in the final TV debate on the economy Thursday, drawing on his vast treasury experience and banking on a political miracle after an embarrassing campaign gaffe.

Slumped in the polls, Brown wasted no time in his last-ditch performance before Thursday's election -- using his opening remarks to neutralize Wednesday's gaffe with a smart quip.

Brown had forgotten to turn off his microphone Wednesday after a Labour voter asked about an influx of Eastern European immigrants. After the conversation ended, Brown was heard muttering "bigoted woman" and blaming aides.

"There is a lot to this job, and as you saw yesterday -- I don't get all of it right," Brown said, referring to his gaffe. "But I do know how to run the economy in good times and in bad."

The first U.S.-styled debates have spurred an unexpected transformation in Britain's politics and shaped the election, one of the closest in decades. Months ago, the Conservatives' David Cameron was favored as the winner, but he was eclipsed after the first domestic debate when Nick Clegg, leader of the perennially third-placed Liberal Democrats, stole the show. Cameron rebounded in the second showdown, on foreign policy, but has so far failed to win enough support to claim an outright majority in Parliament. Brown has consistently trailed behind the two but hoped to win on the economy.

Britain faces mammoth economic troubles in the coming years with the one of the largest deficits in Europe -- a $235.9 billion sum racked up during the global financial crisis. An 18-month recession has led 1.3 million people to be laid off, while 50,000 families have lost their homes. Whoever wins the vote, it seems inevitable the country will feel the harshest cuts to public services since World War II. Taxes, meanwhile, are sure to rise and recovery measures could be stalled with a hung Parliament.

The economy "really is the defining issue of the campaign -- so we'll have to hope that they will finally be nailed down on the subject," said Howard Archer, chief U.K. economist at IHS Global Insight.

All three main parties have been reluctant to say what they plan to cut -- answers that could lose votes. Labour wants to delay budget trimming by about a year, seeking to encourage economic growth. The Liberal Democrats plan an assault on tax loopholes and tax breaks for the poor. The Conservatives, which won an endorsement from The Economist on Thursday, want to immediately slash spending and freeze public pay rises.

Cameron came out fighting in his opening remarks, calling for reforms to financial regulation and insisting Britain must rebuild its depleted manufacturing sector.

"First we have to reward work and tackle welfare dependency," he said. "Second, we have to fix our banks, tax them to get our money back, regulate them properly and get them lending again. Third, we have to start making things again in this country, it's no policy to just borrow from the Chinese and buy goods made in China."

After a bruising 24 hours, Brown hoped to shine by showcasing his economic prowess -- he has the most economic experience of the three, was treasury chief for a decade, and presided over much of Britain's recent growth.

Brown used opening skirmishes in the debate to remind voters of his handling of the economic storm, which included nationalizing some banks, and discussed fears that Greece's debt crisis could spread through Europe. Currencies and stock markets tumbled Wednesday on fears over Athens' plight.

"Economies in Europe are in peril, and there is a risk of dragging us into recession," Brown said. "So I'm determined that nothing will happen in Britain that will put us back in that position. Shrink the economy now as the Conservatives want to do and they risk your jobs, your living standards and your tax credits."

In two weeks since the first debate, Clegg has emerged as a credible new contender to lead Britain -- shaking up the dominance of Labour and the Conservatives, the two major parties who have traded power since the 1930s, and spawning headlines that have read: "Cleggmania."

Support for the Liberal Democrats has jumped dramatically -- to about 30 percent of potential votes in opinion polls -- from 18 percent. The latest polls show Cameron's party leads with about 33 percent and Brown's Labour sits third with 28 percent.

Clegg, a polyglot politician, has been interviewed on television in Dutch and French on the campaign trail. He has also chatted with reporters from Germany in their native tongue and spoken to Spanish journalists. His wife is Spanish and his father, Sir Nicholas Clegg, is chairman of the United Trust Bank, which specializes in property finance.

Still, the anthropology major and school actor has the least financial experience of the three candidates.

During his opening remarks, he called for tax breaks for Britain's poorest workers, but said services such as schools and hospitals needed to be protected.

"We need to break up our banking system so that irresponsible bankers can never again put your businesses and your savings at risk," he said. "We have to rediscover our passion for innovation, for building things, not just placing bets on the money markets. We need fairer taxes, so that you don't pay any income tax on your first 10,000 pounds."

The showdown was the most combative yet, with Brown and Cameron repeatedly trading blows over other's policies on tax, and potential cuts to welfare.

"What you are hearing is desperate stuff from someone who's in a desperate state," Cameron said of Brown. In response, Brown accused his rival of plans that were "simply unfair and immoral."

Seizing another chance to ridicule both his rivals, Clegg pounced.

"Here they go again," quipped Clegg, recalling President Ronald Reagan's 1980 putdown of Jimmy Carter, when he famously said of his rival: "There you go again,"

Wavering voters say economic policies will be key as they decide who'll win their vote next Thursday.

Some angry Britons blame an influx of 6 million foreigners since Brown's Labour took office in 1997 for worsening their plight. Immigrants -- many from poor countries -- have been accused of snatching jobs, pushing down wages and overwhelming welfare services.

It was the immigration issue that put the prime minister into trouble Wednesday.

Brown, forgetting that he had a television microphone pinned to his chest, called 66-year-old widow Gillian Duffy a "bigoted woman" after she needled him on issue.