Darling pledges to rein in spending, debt

Alistair Darling today pledged new legislation to commit the government to reducing its budget deficit every year.

He said the UK economy would be put on a 'sustainable path' with a Fiscal Responsibility Act, which would also put a leash on national debt.

In his speech to the Labour party conference in Brighton, the chancellor did not specifically mention public spending cuts but did accept he would have to 'cut waste, cut costs, and cut lower-priority budgets'.

But he said more frugal balance sheets did not herald a return to the 'Tory dark ages'.

'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,' he said.

Mr Darling said his Pre-Budget report, due to be delivered in the next few weeks, would add new protections to frontline public services.

He also promised legislation to end automatic bonuses in the City even when banks are failing.

'In the next few weeks we will introduce legislation to end the reckless culture that puts short-term profits over long-term success,' Mr Darling told delegates.

'It will mean an end to automatic bank bonuses year after year. It will mean an end to immediate payouts 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.'

The chancellor also insisted that he stood by his Budget predictions of a UK economic recovery next year; months after the economies of Japan, France and Germany came out of recession.

On unemployment, he said it was 'not within the power of any government' to protect every job.

'But we believe it is our responsibility to support people in every way possible to find new employment,' Mr Darling said.

On his opposite number, Mr Darling accused George Osborne of lacking the 'grown-up' credentials to engage in a mature debate on the issues contained in his speech.

And with regards to tax-havens, the eradication of which was a G20 London summit pledge, Mr Darling said details of 100,000 offshore accounts had been demanded, which would see 'billions of extra unpaid tax returning to our country'.