Darling to outline economic stability plans soon

Alistiar Darling will make a statement to MPs on Monday

Sunday, 05, Oct 2008 11:56

The chancellor has said he will be setting out plans to restore confidence in the banking system soon and repeated his commitment to do "whatever it takes" to stabilise the banking system.

Alistiar Darling will statement to MPs on Monday on the financial crisis at the first parliamentary session after the summer recess.

The government is also putting forward legislation in the coming days to give authorities enhanced powers to support troubled banks.

And he said a broad range of measures were being considered.

Speaking on the BBC’s Andrew Marr show the chancellor said: "We are looking at some pretty big steps which we would not take in ordinary times but we are ready to take them."

Also appearing on the show were Lib Dem treasury spokesman Vince Cable and shadow chancellor George Osbourne. Mr Cable said the chancellor should consider writing to the Bank of England urging it to cut interest rates adding that such a cut in rates needed to be pretty drastic to restore confidence.

Mr Osbourne called on the government to consider the even more drastic measure of providing funds to recapitalise British banks, a move he said he believed the government was giving some consideration to.

Both men said they were willing to support the government and that partisan issues must be set aside in order to save the economy from meltdown.

Mr Darling welcomed cross-party support but said he would not be writing to the governor of the Bank of England to seek a cut in rates arguing the Bank had been given its independence and set parametres within which to work to enable it to deal with “good times and bad”.

He said the Bank had the dual function of maintaining economic growth while also keeping inflation under control and should therefore remain free of political interference.