Alistair Darling today pledged there would be no tax increases as he publicly admitted plans to increase public borrowing to help Britain through the current economic crisis.

The Chancellor told delegates at the Labour Party conference that allowing borrowing to rise was the right thing to do to support the economy and families when they needed it most.

He was speaking after an influential report said that Britain may have to borrow £90 billion next year – almost twice as much as the Chancellor had expected – to deal with the ramifications of the global credit crisis. Economists have said the rise in borrowing would probably lead to tax rises for voters in the future.

However Mr Darling told the BBC earlier today: "This is not the time to be imposing additional burdens and indeed actually, this month, the vast majority of basic rate taxpayers, the 22 million people, are actually getting a tax rebate, a tax cut...

"I really don't think I can make the position any clearer than that. Basic rate taxpayers are receiving a tax cut."

During his speech in Manchester today, the Chancellor echoed Gordon Brown by promising to do “whatever it takes” to maintain stable financial markets.

As well as helping to orchestrate the takeover of HBOS by Lloyds TSB and banning speculative trades on bank stocks, Mr Darling also promised to strengthen the way banks are supervised globally as well as introducing new regulations for UK banks in a fortnight as part of a new banking reform bill.

Signs of a global response came immediately after Mr Darling stepped off the stage, as the Group of Seven finance ministers issued a statement to say they were maintaining “heightened close co-operation”, and pledged to take whatever actions were necessary to ensure stability.

Mr Darling also gave warning of an impending crackdown on the role of credit agencies, the institutions that gave high ratings to packages of risky American mortgages that were then sold around the globe.

“We want to improve ways in which credit rating agencies work,” Mr Darling said. “Ending conflicts of interest and opening up the way they work”.

Mr Darling attacked the “culture of huge bonuses” which he said have distorted the way decisions are made.

To huge applause from the audience, he said: “It’s essential that bonuses don’t result in people being encouraged to take on more and more risk without fully understanding the damage that might be done, not just to their bank, but to the rest of us in the wider economy”.

Times Recommends

• The bright side of this winter rain
• Story behind the picture: Snow Leopard, 2008
• Times Charity Appeal: The Place2Be