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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”.

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Alistair Darling says 'Basic Tax payers are getting a tax cut' am I missing something here? The 10% tax band was abolished and now he is giving some of that money back. Maybe I don't understand? or is the current government , believing it's own deceitful misinformation.
Keith Hillman, PHETCHABURI, THAILAND
Ten years ago I would have said that these people were just liars. A decade on, after twenty years dealing with local government and The Office of The Deputy Prime Minister, I can quite believe that they are simply well-meaning incompetents.
They only lie when desperate. Er.. like now.
Mark, Birmingham, UK
Labour have only one policy. Taxation. The poor are not going raise the necessary tax to fund bloated public services to maintain the poor in the lifestyle they have become accustomed to. Sky, Nike etc.
steve tea, manchester, cheshire
I really don't think I can make the position any clearer than that. Basic rate taxpayers are receiving a tax cut
Rubbish - they are getting back some of the money stolen from them in the 10p tax fiasco.
Colin, Bridgwater, UK
You'll be paying much more for fuel, car tax, VAT, National Insurance, prescriptions, insurance policies and no doubt even the Dartford tolls will be substantially hiked.
They mustn't get away with it, the only thing these people understand will be the shoeing they get at the next election.
Paul, London,
What we need is huge tax increases to be levied on the fat cats who have engineered this disaster. All those huge salaries and bonuses as the financial institutions made paper billions now need to be clawed back as the true worth of their 'success' comes home to roost!
Graham, Pattaya, Thailand
I wonder if anyone could explain why the hard lefts enlarged envy genes over-react whenever city bonuses are mentioned but remain dormant when they hear of footballers earning over £100,000 a week?
Brian Christley, Abergele, UK
Yeah- right!
As if we can belive anything Labour says.
Peter, London,
Darling's speech was full of the same old rhetoric. Basically, 'not my fault & a global thing'. He certainly did not inspire confidence, rather we should all pray for a General Election soonest.
B.garvie, Reading, England
VAT: 20 percent by next spring.
David Masu, Zürich, Switzerland
What a mess, Time to get GB working again, no more hand outs, close the boarders, give us a chance to find work, live to your means and get rid of new labour before they bring down the country!
oliver, colchester,
My recollection of the last three general elections is that Labour pledged not to increase the Basic and Higher rates of Income Tax, and despite being invited to do so by countless interviewers, they never ruled out other tax increases. Maybe some of you just hear what you want to hear?
Simon Stock, Meppershall, Bedfordshire
Of course Mr Darling can promise no tax increases: he will not be Chancellor when the UK comes out of this mess! Once again the Tories will have to raise taxes to pay for Labour's poor economic management.
John Scott, London,
Oh ha ha ha. No-one believes a word they say any more.
Jeremy Poynton, Frome, England
Why not cut taxes and borrow some more?
And all those poor investment bankers, the engine of our economy? Lets borrow a load of money and give it to them too, so they can lend some of it to the the rest of us.
Borrowing is free money, stupid!
LMcKay, North Shields, uk
This is not true. He was asked three times if income tax would increase to pay for the banks mess and he avoided the question every time.
We will see stealth tax after stealth tax to help out an institution that has raked in billions over the last 13 years.
Where are the shareholders now?
Adrian Jones, Whitehill, UK
Irresponsibilty begins at home. Ministers making false declarations to get inflated mortgages, MPs making false expenses claims, short sighted tax charging meaning people go for houses instead of pensions and not cutting their own numbers and thereby costs, as everyone else is.
alan, worcs, UK
Then go with gormless and lead some other country.
Useless spineless rabble.
Ruined our Britain
Nu labour...
What a Fiasco!
eric, newcastle, cruel brittania
reckless PS borrowing will wreck this country through a collapsed pound and the consequent high inflation. Darling must raise taxes he has no choice
peter c, Devizes, Wessex
I watched the BBC interview with Mr Darling this morning on Breakfast . Mr Darling when asked twice by Bill Turnbull "Are you going to increase taxes, yes or no?" refused to give a straight answer. He certainly did not promise anything.
Patricia, Chester, UK
Yes I remember last time they said there would be no rise in income taxes - then they put up NI, that is a tax on income.
Truth and this lot are very far apart which is what people have finally realised.
charlie clark, glasgow,
You can see in your mind's eye the fiends at the treasury going through all the other ways in which they can introduce other stealth taxes.
John Tomlinson, Brentwood, UK
"I...don't think I can make the position any clearer.... Basic rate taxpayers are receiving a tax cut."
Only by default since it was the least complicated solution to the problem created by the Grand Intellect's abolition of the 10p tax rate. It's also a 'one-off'. What about next year?
m collins, Leeds,
Have the financial fat cats given him their orders. "You aren't taxing us mate, look to recover what we have taken some other way."
Fred, Moray, Scotland
Government borrowing = Future taxation.
So no tax rises - yet.
It is future generations that will be made to pay for this nonsense.
The only way out is to cut spending, just like for everyone else that lives beyond their means... But that would make GB unpopular with the unions.
Pat, Coromandel, NZ
How about this for an idea? CUT SPENDING.
Our income has been cut in half as my wife's on maternity leave. Have we borrowed more? No, we've cut our spending. Why can't this bunch of fools apply the same principal to UK?
Reducing budgets by 5% shouldn't be difficult - unless they can't count...
James, London,
From an OECD Report: 45% of UK GDP goes in tax up from 37.5% in 2000.
According to the European Central Bank the UK gov wastes £99 billion a year. Gordy says he will do better. He has only had 10 years to do better. Darling says he is a good leader. Who will rid us of these oafs?
Richard, London, UK
I should hope not too! Here's a tip Mr Darling - use the massive amounts of taxation you already collect more efficiently. You never know - you might even get re-elected then!
Mike, Bristol, UK,
And we should believe anything they say...why?
Dave, Harlow, UK
No increases in taxes - no problem, increase National Insurance, presecription charges etc. instead - just as Gordon did before.
Stuart , Stafford,