Confident Darling pledges to spend
The Chancellor has stuck by his forecasts for the economy to recover at “the turn of the year” as he pledged to keep spending to see the UK out of recession.
Alistair Darling said he was “confident” of a return to growth and a sustainable recovery, despite ongoing risks to the global economy.
Ahead of a meeting of the G20 ministers next month, Mr Darling wrote in a Guardian newspaper article that the Government was prepared to spend “whatever we can” to tackle recession and soaring unemployment.
Mr Darling also said Britain was ready to commit $11bn (£6.8bn) to the International Monetary Fund (IMF) as part of a co-ordinated response to the global financial crisis.
World leaders said in April that they would treble the IMF's resources to $750bn (£463bn) to help support the emerging markets most hit by the recession.
The UK and Europe should take the lead in helping meet the target, according to the Chancellor.
And in the UK, there would be no “let-up in the reform of the financial sector” with more to be done on curbing pay and bonuses, he said.
“I am determined the recovery will be sustainable and lasting, that no-one should be consigned to the scrapheap, like so many were in the recessions of the ‘80s and ‘90s,” wrote Mr Darling.
He added: “My priorities are clear: keeping people in work, getting credit flowing and getting public spending on a sustainable footing in the medium term.
“In the past year, we have committed an additional £5bn to make sure that we don't leave people to languish on the dole.
“And in the run-up to the pre-Budget report, I will consider further measures.”
His comments follow official figures on Friday which revealed that the economy contracted by less than originally feared in the second quarter — down 0.7% against the first estimate of a 0.8% decline.
But there are fears of a price shock for consumers and businesses as tax breaks and support measures come to an end.
A 2p rise in fuel duty takes effect today (Tuesday), while there will be a return to 17.5% VAT in the new year, as well as the end of a stamp duty holiday looming large and an expected closing of the car scrappage scheme within months.