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Darling calls for growth plans

There needs to be a "credible plan for growth" both in Britain and Europe to help rebuild confidence and avoid more countries tipping into recession, former Labour chancellor of the exchequer Alistair Darling has warned.

Mr Darling told BBC1's The Andrew Marr programme that now was "precisely the time" the UK Government needed to be investing in new infrastructure and improved transport links to aid growth in the British economy.

He said: "You asked what's happening about growth in this country; the answer's quite simple, there isn't any. The economy was growing in 2010, we're now back in recession, something I didn't think would happen."

He added: "There is no doubt that reducing public expenditure at a time when businesses and individuals stop spending does run the risk of crashing the economy, and that's pretty much what's happened."

Mr Darling said that unless governments had the revenues that came from growth, with people earning more and paying more taxes, there was a risk that borrowing would go "the other way".

He added: "The real problem is that until people can see a credible plan for growth both in the UK and in Europe, confidence will remain at a low level and the risk is not just you bump along the bottom, but even worse, more countries tip into recession, so that's the problem that we've got to confront."

The Government, he said, was borrowing "£150 billion more than it intended to do", adding: "I think it is better if you're going to borrow, to borrow to invest in those things that will serve us well in the future."

Spelling out his recommendations for the eurozone, Mr Darling spoke of the need for a "proper settlement for Greece that is credible", concrete steps to "clean up" the banking system in Europe and the need to "abandon this ridiculous treaty they've got which imposes on countries that are at or near recession an obligation to keep cutting, driving themselves into an ever-increasing downward spiral".

Mr Darling warned Europe was in a "very dangerous position at the present time", adding: "It's going to take a crisis, an absolute crisis, to make Europe's leaders act. That's what happened four years ago. I'm afraid that's what's going to be needed in the future."

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