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Darling pledges action on economy Darling pledges action on economy
(40 minutes later)
Chancellor Alistair Darling has pledged action to deal with the "extraordinary" turbulence" in the financial system in his speech to the Labour conference. Chancellor Alistair Darling has pledged action to deal with the "extraordinary turbulence" in the financial system in his speech to the Labour conference.
He promised to avoid "knee-jerk" reactions but instead take measured decisions for long-term stability. He said the UK economy was going through "difficult times" but said he was "confident" it would emerge from the current downturn stronger.
His speech comes as experts say taxes will have to rise as borrowing soars. He promised to avoid "knee-jerk" reactions, saying his main priority was to stabilise the banking system.
Asked by the BBC if income tax would go up Mr Darling declined to answer "yes" or "no", instead saying "it is not the time to take money out of the economy". Mr Darling also said Gordon Brown was the best man to deal with the crisis.
Uncertain times
Mr Darling sought to reassure Labour delegates that although the UK was facing "unprecedented economic challenges", the Labour government had the right policies to deal with them.
"These are very uncertain times," he said.
"But one thing I am certain about is that we have the right prime minister, the right team and the right policies to help the country through them."
Alhough the economy was facing a "bumpy" period ahead, Mr Darling said its fundamental strength "means we can be confident about the future".
Mr Darling said the action the government had taken to support the troubled banking system in recent days contrasted with the attitude of the Conservatives who had "walked away" from tough decisions over the Northern Rock and other key issues.
"They may well claim to be committed to financial stability but people should be judged on what they do not what they say," he said.
Mr Darling said he was committed to taking whatever steps were necessary to tackle turmoil in the markets while warning that solutions to the problems of globalisation will not be found by one government alone.
Mr Darling said the government would be "disciplined" in its attitude to the public finances and would have "to live within its means".
Many experts have said taxes will have to rise to cope with the shortfall in revenue as the economy slows.
When asked earlier by the BBC if income tax would go up Mr Darling declined to answer "yes" or "no", instead saying "it is not the time to take money out of the economy".
When asked again, Mr Darling told the BBC that the time to pay back debt was when the economy was doing better.When asked again, Mr Darling told the BBC that the time to pay back debt was when the economy was doing better.
He also said that at the moment, rather than increasing taxes, basic rate tax payers were paying less tax this month.He also said that at the moment, rather than increasing taxes, basic rate tax payers were paying less tax this month.
He rejected calls from union leaders and MPs on the left of the party for tax rises for the wealthy and also for a "Robin Hood" energy tax.He rejected calls from union leaders and MPs on the left of the party for tax rises for the wealthy and also for a "Robin Hood" energy tax.
His speech followed a debate during which unions and some Labour MPs demanded a windfall tax on energy firms to help impoverished households pay their gas and electricity bills.
The demands for a levy, which was rejected by Mr Brown earlier this month, were spearheaded by Unite's joint general secretary, Tony Woodley.
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"I don't want to destabilise the tax system," he said.
Referring to the government's recent energy efficiency initiative, he added: "We have got out of the energy companies rather more, I suspect, than we would have got out of a windfall tax."
Addressing the same issue, Business Secretary John Hutton said a tax would deter potential investors.Addressing the same issue, Business Secretary John Hutton said a tax would deter potential investors.
Mr Darling encouraged banks to behave "responsibly" in the current crisis but would not commit to action to curb City bonuses, saying this was just one issue being looked at by financial regulators.Mr Darling encouraged banks to behave "responsibly" in the current crisis but would not commit to action to curb City bonuses, saying this was just one issue being looked at by financial regulators.
"We need to toughen up the system but we need to do it effectively and in a way that works," he said."We need to toughen up the system but we need to do it effectively and in a way that works," he said.
Mr Darling also gave strong support to Gordon Brown, saying the prime minister was a man of "conviction" and "remarkable resolution", adding that the cabinet was "remarkably unfactional". class="lp" href="http://news.bbc.co.uk/1/hi/talking_point/default.stm">HAVE YOUR SAYDarling is saying he will tackle faults in the economic system, what is the purpose of a chancellor?Confusus, Wales class="" href="http://newsforums.bbc.co.uk/nol/thread.jspa?forumID=5375">Send us your comments
The windfall tax and other fuel poverty calls were backed by delegates at the party conference.
However the result is largely symbolic - it means the party's National Policy Forum will have to discuss the issue, rather than actually making the issue official party policy.
The chancellor and Prime Minister Gordon Brown will fly from the conference to New York to seek international agreement on tighter regulation of the financial sector.The chancellor and Prime Minister Gordon Brown will fly from the conference to New York to seek international agreement on tighter regulation of the financial sector.
On Sunday, Mr Brown told the BBC he was considering a crackdown on "irresponsible" City bonuses which encouraged "excessive" risk-taking.On Sunday, Mr Brown told the BBC he was considering a crackdown on "irresponsible" City bonuses which encouraged "excessive" risk-taking.
'Mistakes and misjudgements'
In his keynote speech, Mr Darling is also committing to taking whatever steps are necessary to tackle turmoil in the markets, but will also warn that solutions to the problems of globalisation will not be found by one government alone.
HAVE YOUR SAYDarling is saying he will tackle faults in the economic system, what is the purpose of a chancellor?Confusus, WalesSend us your comments
His speech came in a debate during which unions and some Labour MPs have demanded a windfall tax on energy firms to help impoverished households pay their gas and electricity bills.
The demands for a levy, which was rejected by Mr Brown earlier this month, were spearheaded by Unite's joint general secretary, Tony Woodley.
Other ministers to speak on the third day of the conference include Foreign Secretary David Miliband, Defence Secretary Des Browne, Business Secretary John Hutton and Welsh Secretary Paul Murphy.Other ministers to speak on the third day of the conference include Foreign Secretary David Miliband, Defence Secretary Des Browne, Business Secretary John Hutton and Welsh Secretary Paul Murphy.