Author: By Andrew Woodcock, Press Association
Voters will be faced with a “big choice” between a dogma-driven
Conservative Party which is “relishing the chance to swing the axe at
the public services millions rely on” and Labour which will protect
frontline services from cuts, he said.
In his keynote speech to Labour’s annual conference in Brighton, the
Chancellor issued a warning to bankers that there can be “no return to
business as usual” after the recession, with legislation planned to end
automatic bonuses and curb the reckless pursuit of short-term profits.
But just days after warning that Labour appeared to have no “fire in our
bellies”, Mr Darling directed his fire mostly at the Tories, accusing
Mr Cameron and shadow chancellor George Osborne of getting every major
decision wrong on the recession.
He evoked the memory of the Thatcher and Major administrations, which he said
left “a legacy of disdain, underinvestment and shaming poverty”,
and warned that a return to Tory rule would again inflict damage on the
fabric of the nation.
Mr Darling said that Labour could be “proud” of its handling of the
economic crisis and boasted that countries around the world would not have
moved towards recovery “without Gordon Brown’s leadership”.
It was “too early to say with total confidence” that the UK was
coming out of recession. But the Chancellor stuck by his prediction in the
April Budget that recovery would be under way by the turn of the year.
He restated Labour’s acceptance that “spending will have to be tighter in
the years ahead”, repeating his pledge to bring down the £175 billion
state deficit by half within four years. But he insisted that growth, not
cuts, was “the best way of reducing debt”.
And he said that Conservative plans for faster and deeper spending cuts would
damage the economy and endanger the fragile recovery.
“If we followed the Tory route now, recovery would be put at risk,
prospects for growth damaged, borrowing would in the long run be greater,”
said Mr Darling.
“We cannot and must not let that happen. And we cannot – must not –
repeat their mistakes of the 1980s and 1990s when short-term job loss became
long-term unemployment for a whole generation.”
The Conservative approach “is wrong, is naive and downright dangerous”,
while Mr Osborne had contributed “little that is grown-up” to the
debate on the economy, he said.
And he told delegates: “The Tories have been wrong on tackling the
recession. They are wrong on how to ensure recovery. And they will make the
wrong decisions on our public services.
“They are wrong because on every question, the Tory answer is to step
back, to walk away, to leave people on their own.
“So that will be the choice in the next few months. Maturity and
experience against the politics of the playground. Investment in the future
against a return to the past.”
Voters in the election expected in the spring will face “a choice between
a Labour Government which believes passionately that front-line public
services are vital to support everyone to meet their ambitions and a Tory
party which has reverted to type and is relishing the chance to swing the
axe at the public services millions rely on,” he said.
Liberal Democrat economics spokesman Vince Cable said he found it
extraordinary that measures to curb excessive bonuses were only being
introduced a year after the height of the banking crisis.
“It shows a sense of urgency which is absolutely mind boggling,” he
told Labour activists at a conference fringe meeting.
Mr Darling did not give precise details of the new Business and Financial
Services Bill to clamp down on banking excesses which will be included in
November’s Queen’s Speech and pushed through Parliament before the election.
But he said: “Let me assure the country – and warn the banks – that there
will no return to business as usual for them.
“So in the next few weeks we will introduce legislation to end the
reckless culture that puts short-term profits over long-term success.
“It will mean an end to automatic bank bonuses year after year. It will
mean an end to immediate pay-outs for top management.
“Any bonuses will have to be paid over years, so they can be clawed-back
if not warranted by long-term performance.
“We won’t allow greed and recklessness to ever again endanger the whole
global economy and the lives of millions of people.”
Mr Darling accepted that debt had risen as the Government launched an
unprecedented fiscal stimulus package to shore up the banks and fight the
effects of recession. But he rejected Tory claims that Britain was faring
particularly badly, saying that debt had risen “not just here but
around the world”.
“Had we not borrowed, we would have made a very difficult situation far
worse,” he said.
“The recession would have turned into depression and debt would have been
more, not less. And this increased debt would be spent not in supporting
jobs and families now but on long-term welfare bills.
“It would have been irresponsible to walk away when the economic shock
waves hit our country.
“It will be equally irresponsible, once recovery is secured, not to take
tough action so we can live within our means.”
Acknowledging that cuts are inevitable following the election, Mr Darling
said: “In order to get borrowing down, spending will have to be tighter
in the years ahead, against a background where public investment has tripled
over the past decade.”
But he added: “Tighter spending doesn’t mean a return to the Tory dark
ages. It does mean a determination to cut waste, cut costs and cut
“This will require difficult decisions. I haven’t shirked them in the
past, I won’t shirk them now.
“We must keep the public finances on a sustainable path. The long-term
health of our economy depends on it.
“That is why we will introduce a new Fiscal Responsibility Act to require
that the Government reduces the budget deficit year on year, ensuring that
the national debt remains sustainable in the medium term.
“But we need to do that rationally, in a way that is right for the
economy, not driven by dogma.”
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