Darling warns of economic crisis
The UK is facing its worst economic crisis in 60 years, Chancellor
Alistair Darling has admitted.
He told the Guardian newspaper that the economic downturn would be more
"profound and long-lasting" than most people had feared.
Using strong language, Mr Darling acknowledged voters were angry with
Labour's handling of the economy.
Shadow chancellor George Osborne said Mr Darling had "let the cat out of
the bag" about the state of the economy.
The chancellor admitted the government had "patently" failed to get its
message across that it understood people's concerns about rising living
costs and growing job insecurity.
He said that voters were "pissed off" with Labour's handling of the
economy, a key issue at the next election, and said it was "absolutely
imperative" that ministers communicated their intentions better.
This coming 12 months will be the most difficult 12 months the
Labour party has had in a generation, quite frankly
Alistair Darling
"This coming 12 months will be the most difficult 12 months the Labour
Party has had in a generation, quite frankly."
When asked why he had been so frank, Mr Darling told BBC News: "It's
important I tell people in this country that we, along with every other
country in the world, face a unique set of circumstances where you've
got the credit crunch coming at the same time with high oil and food
prices."
But he said the current government differed from past ones because it is
prepared to "take action to help the economy and to help people get
through this difficult time".
He cited the rescue package provided for Northern Rock and tax rebates
due at the end of next month as examples of assistance offered by the
government.
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How the government is trying to kick-start the housing market
Ministers are expected to announce a package of measures next week to
kick-start the moribund housing market.
The chancellor has been criticised for sending contradictory signals
over possible measures to assist homebuyers, particularly the prospect
of a temporary suspension of stamp duty on home purchases.
In a wide-ranging Guardian interview, Mr Darling said Labour had to
rediscover its "zeal" if it wanted to be re-elected for a fourth term.
But he admitted that was "a huge problem for us at the moment".
Mr Darling hinted at tensions within Gordon Brown's Cabinet, saying
there were "lots of people who'd like to do my job" and "no doubt,
actively doing it", although he appeared to rule out an autumn Cabinet
reshuffle.
The chancellor's remarks come after a summer of unremittingly bad
economic news.
House prices are falling at their fastest rate in 18 years, leading to
fears of a wave of repossessions.
Mortgage lending has slowed dramatically due to the credit crunch while
key indicators have suggested that the economy could be poised to go
into recession.
The economy showed no growth in the second quarter of the year while
building firms and retailers have laid off thousands of staff amid fears
that the economy will deteriorate further.
A member of the Bank of England's Monetary Policy Committee said on
Friday that radical action was needed to ensure the crisis did not get
worse and warned of a sharp rise in unemployment.
Mr Osborne said: "Who is telling the truth at the top of government?
"The prime minister says the economic situation isn't as bad people
think and that Britain is well placed to weather the economic storm but
the chancellor says we are at a 60-year low.
"Gordon Brown has briefed out stories that he has an economic recovery
plan all worked out, meanwhile the chancellor says the downturn will be
more profound and long-lasting than people thought.
"It's not clear whether Alistair Darling meant to tell us the truth
about the mess 10 years of a Labour government has left our economy in,
but he has certainly let the cat out of the bag."
HAVE YOUR SAY He has come out and been frank, but I have no sympathy and
nor I hope has anyone else! James, Surbiton
Liberal Democrat Treasury spokesman Vince Cable said the government had
been inconsistent with its message.
"Until very recently there was no problem, there was a state of denial,
Britain was the strongest country in the western world, any problems we
had were from overseas," he said.
"Now suddenly we've lurched into Apocalypse Now, the return of the Great
Depression."
The Treasury said the chancellor's comments were "entirely consistent"
with his previous statements.
A spokesman said: "These are the same difficult economic circumstances
that every other country in the world is having to deal with.
"But with employment levels near record highs, interest rates that are
historically low and the past decade of rising incomes and job creation,
the UK is well placed to deal with this."
Story from BBC NEWS:
http://news.
Published: 2008/08/30 12:11:32 GMT
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Saturday, 30 August 2008
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