[Pounds Sterling]20bn Spree Was Not Enough, Says Darling; Alistair Darling: Poll Setback

Article excerpt

Byline: Benedict Brogan

ALISTAIR Darling admitted yesterday that the Treasury will have to pump more money into the economy to tackle the recession.

His candid assessment came as doubts about his recovery plan intensified.

It will dismay those who hoped last week's [pounds sterling]20billion giveaway would mark a turning point. And it will fuel Tory claims that the Government has pencilled in steep rises in VAT after the next General Election.

Tessa Jowell, meanwhile, became the first senior minister to admit 'justifiable anxiety' about tax rises on high earners in 2011. The Olympics minister said the new 45p rate should not become the 'thin end of the wedge' in case it revived fears of the politics of envy.

Last week Mr Darling announced that the national debt will double to more than [pounds sterling]1trillion as the Government borrows more to fund tax cuts in the battle for recovery. But he admitted yesterday that he would 'almost certainly' have to do more to jump-start consumer activity.

The Chancellor said: 'You'd be very foolish to say "well, that's the job done". You know this is something that needs constant attention.

'I put more money into the reserve on Monday precisely because I know we're almost certainly going to be doing additional things. The people expect you to do that.' Opinion poll evidence suggests voters already believe his package is a failure. An Ipsos MORI poll for the Observer showed Labour support dropping five points to 32 per cent, ending the 'Brown bounce'.

Support for the Tories has risen by three points to 43 per cent, giving them an 11 point lead.

Only six per cent of those questioned said they would spend more once the cut in VAT to 15 per cent comes into force today. …