LABOUR CONFERENCE:MULTIMILLION-pound bonuses in the United Kingdom for top-flight bankers are to be curbed from next year, and banks are to be urged to cut rewards due before the end of the year, British chancellor of the exchequer Alastair Darling has declared.
Addressing the Labour Party conference in Brighton, Mr Darling said: “Let me assure the country – and warn the banks – that there will be no return to business as usual for them.”
The British government had intervened to save the banks, “not for the sake of the banks themselves” but to ensure that the UK’s economy was not paralysed, sending unemployment rapidly upwards.
Legislation would be passed before next year’s election to stop “the reckless culture that puts short-term profits over long-term success” and order the payments to be staggered over several years.
“We won’t allow greed and recklessness to ever again endanger the whole global economy and the lives of millions of people,” said the chancellor.
Defending the British government’s support for the banks, which will see the UK’s borrowing top £175 billion this year, he said it had been copied by other countries and prevented “a global depression”.
The government’s support, he said, could not be withdrawn now, as the Tories advocated, because it would halt the recovery currently under way, damage growth and cause further unemployment.
However, he warned that tough decisions would have to be made once the recovery had taken root “so we can live within our means”, but he added that it was “too early to say with total confidence” that this had already happened.
“But I stick with my budget prediction that, as long as we continue to support the economy, recovery will be under way in the UK by the turn of the year,” he told delegates.
Darling became the latest Labour minister to attack the Conservatives’ desire for spending cuts now, saying that they had made the wrong choices in all of the major events of the last year.
Labour, he said, was prepared to intervene in the markets for the public good, while the Conservatives’ “natural response is always to step back and not to step in”, he said to loud cheers of delegates.
“As well as being a test of leadership for the government, this crisis was a test of judgment for the Conservatives. It was a test they failed at every turn”
The Conservatives wanted less market regulation, they had urged that Northern Rock should be allowed to fail and had opposed the banks’ rescue plan “as a waste of money”.
Voters, Darling said, faced “a big choice” in next year’s election, “a choice not just about who’s in government, but about the values that will shape our country and the opportunities for our people.
“If we didn’t know a year ago the difference governments can make, we certainly know it now.” He added that it would decide the UK’s culture and society for years ahead.
Labour , would introduce binding legislation to ensure that the UK’s national debt, due to rise to £1.4 trillion by 2013/14 under the government’s own projections, would be brought under control.
Once in law, the chancellor continued, the Fiscal Responsibility Act would require year-on-year falls in the budget deficit, which would be difficult since the UK’s borrowing rose in the years prior to the global economic crash.