UK Chancellor: Need To Make Tough Choices On Spending

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Tuesday, UK's Chancellor of the Exchequer Alistair Darling said in Cardiff that it is necessary to see slower growth in public spending in the coming years. Every nation would experience similar pressures.

Money should be allocated to those areas where it will make the most positive difference to people's lives. "We will need to make tough choices," Darling said.

According to the Chancellor, it is still early days and the economy remains in global downturn. The biggest rise is complacency, a belief that we are through the hard times and can relax, he said in a lecture.

As Finance Ministers agreed at the weekend in London, the economy still needs the extra support both in the UK and abroad. The UK economy might begin to expand again by the turn of the year, provided the policies put in place are continued.

Darling also said the unprecedented nature of the global economic crisis and the action that was needed, has led to Government borrowing rising sharply across the world. But the cost of stepping back and letting the recession take its course would have been far higher.

That is why, G20 nations agreed that once recovery is firmly established, we must all rebuild our fiscal strength, he added.

Darling assessed that cutting support at this point would run the risk of choking off the recovery even before it started and prolonging the global downturn. "But in the medium-term we need to live within our means, not to do so would be equally irresponsible and damage our country's future," he said.

He added, "It is why in the Pre-Budget Report, and then in this year's Budget, I set out plans to half the deficit over four years once the recession is over - and we will not shy away from these plans."

The global economic background means that spending will be tighter everywhere. Properly targeted public investment can and must make a difference. This means making choices as well as setting priorities and shifting resources to the front line. Darling said coming few years will be difficult.

He will deliver the pre-Budget report during the autumn, formally giving details of his plans.

(Market News Provided by RTTNews)