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 20 August 2008 21:05 BST

Darling looks at reform over economic 'squeeze'

Saturday, 19 Jul 2008 16:09
Darling considers fiscal reform as public feel 'squeezed'
Chancellor Alistair Darling has said he is considering fiscal reform due to the British public feeling "squeezed" by the economic downturn.

While he would not give more details over whether he would relax borrowing rules, Mr Darling revealed he had told ministerial colleagues not to ask for budget increases.

After official figures revealed public sector borrowing reached £24.4 billion in the first quarter of the financial year, the highest total in more than 60 years, it is believed fiscal plans introduced by Mr Darling's predecessor Gordon Brown will have to be relaxed.

And speaking to the Times newspaper, Mr Darling admitted the Treasury was deliberating over an alteration to the present borrowing limit of 40 per cent of national income, but added: "This is routine work that has been going on… for several months."

He said tax rises were unlikely, explaining: "People will pay their fair share but you can't push that. My judgment at the moment is that there are a lot of people in this country who feel they work hard, they make their contribution and they're feeling squeezed.

"Every chancellor has to be very conscious of the fact that there's a balance to be struck."

He added: "I've been very clear with my colleagues that there is no point them writing in saying 'Can we have some more money?' because the reply is already on its way and it's a very short reply.

"I told them at the last meeting of Cabinet they've got to manage within the money they've got."

Shadow chancellor George Osborne had earlier said Mr Darling's remarks revealed "the end of the Brown era of economics".

Liberal Democrat Treasury spokesman Vince Cable, meanwhile, said the Treasury's planned fiscal reform was "embarrassing, even humiliating" for the government. End of story


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