Darling warns of 2011 action to combat national debt

CHANCELLOR Alistair Darling today warned of significant action needed next year to reduce Britain's ballooning national debt, but said public spending cuts would be "fair and manageable".

In a Treasury Select Committee hearing on last week's Budget, Mr Darling defended targets to halve public sector borrowing in four years as "sensible and doable", although he braced the country for tough action next year once the economy is on a firmer footing.

He cautioned in last week's Budget that the upcoming spending review, which is planned post-Budget, would be "the toughest in decades".

Government efficiencies planned for public services include annual savings of 15 billion to 20 billion by 2013-14 from the NHS – a fifth of its budget.

"From next year, we do need to take significant action to reduce the amount of borrowing we are carrying," he told MPs.

"We can do it in a way that we can protect front-line services and that doesn't damage the fabric of our economy," he added.

Mr Darling said he is more confident of "modest" economic growth this year, but he added that risks over growth in Europe pose a threat to the UK's recovery.