Darling stands by Budget for growth pledge

CHANCELLOR Alistair Darling has promised a Budget for growth in March, despite warnings that Britain will lose its AAA credit rating if he does not take immediate action to slash ballooning government debt.

He told business leaders in Edinburgh yesterday that continued public spending was vital to maintain demand until the recovery was assured.

"At a time of low private-sector activity, continued government spending provides vital demand. Pull that support too soon or too rapidly, and you hurt growth, reduce the tax take, push up benefit spending and eventually make borrowing worse.

Government cannot act as a disinterested spectator. Every business and every person depends, some way or another, on well-managed public investment."

Speaking to The Scotsman after the conference at the George Hotel, Darling dismissed any immediate threat to Britain's credit rating. He said: "The markets will back the UK economy and see that we are doing the right thing."

However, business leaders remain unconvinced. David Watt, head of the Institute of Directors in Scotland, said the Chancellor's plans continue to lack detail.