Britain’s ailing Labour takes aim at bankers

September 28, 2009

Britain's Chancellor of the Exchequer Alistair Darling leaves 11 Downing Street for the weekly Prime Minister's Questions session at the House of Commons in central London July 1, 2009. REUTERS/Andrew Winning (BRITAIN POLITICS BUSINESS)   By Sumeet Desai and Matt Falloon
   BRIGHTON, England, Sept 28 (Reuters) – Britain’s Labour Party, trailing in opinion polls ahead of an election next year, promised on Monday to clamp down on bank bonuses and said it had the right policies to overcome recession.
   In a rallying call to centre-left Labour’s annual conference in Brighton, southern England, finance minister Alistair Darling was expected to tell delegates that banks’ “greed and recklessness” would never again be allowed to endanger millions of jobs.
   After 12 years in power, centre-left Labour is fighting for its political life with almost all polls showing it is on course for a stinging defeat in an election due within nine months.
   Prime Minister Gordon Brown, who has struggled to win over the public since replacing Tony Blair in 2007, is stressing his leading role in responding to the global financial crisis as he seeks to turn around his dire poll ratings.
   However, a poll in the Independent newspaper said that Labour would perform better under any of eight alternative leaders. It put Labour 15 points behind the centre-right Conservatives.
   Darling and business minister Peter Mandelson will argue Labour has been right to pump money into the economy to fight the worst recession since World War Two and that the Conservatives would cut spending indiscriminately, jeopardising a recovery.
   Mandelson told Sky News the election was still wide open and that public support for the Conservatives and their leader David Cameron was shallow.
   Darling will promise tough regulation on financial pay in the next few months that will include deferring bonus payments over time and making them subject to clawback but will call on the banks to take action themselves.
   He spoke to French finance minister Christine Lagarde this weekend, according to an aide, and she is expected to make a similar plea to her own banks. Acting now would stop banks from having to pay out annual bonuses this year.
   The cost of the worst recession in decades has sent public debt soaring and Britain’s budget deficit is expected to top 12 percent of GDP, making public spending and how to curb it a key electoral battleground in a contest most likely next May.
   After months of shying away from using the word “cuts” about government spending, Brown signalled he would bring in laws that would make bringing down the deficit legally binding.
   Both Labour and the opposition Conservatives, however, have offered precious little detail on how the budget deficit may be reined in.
   Aides say Labour’s plans and how the new legislation would work would be clearer at the time of the pre-budget report, which is usually delivered in November.
   The next government must spell out how it will return the budget to balance by 2015, two years earlier than planned by the current Labour administration, business lobby the CBI said on Monday.  (Editing by Dominic Evans) ((Additional reporting by Keith Weir; Reuters messaging:; +4420 7542 7708))
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 Monday, 28 September 2009 09:21:54RTRS [nLS360379] {EN}ENDS

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