Tories side with Europe over stimulus plan

The Conservative Party backed Germany and France yesterday in their row with the British Government over how long the global economic bailout should continue.

George Osborne, the shadow Chancellor, accused Gordon Brown of being in "complete denial" over the cost of the measures to stimulate the world economy and said it was time to look for an exit strategy.

Britain has been frustrated by calls from Germany and France to cut support after their economies showed signs of moving out of recession.

Leaders of the three countries put on a united front yesterday ahead of a meeting of finance ministers from the G20 group of nations in London today and tomorrow. They will seek to narrow differences before the G20 leaders meet in Pittsburgh in three weeks. In a letter to their EU partners, Gordon Brown, Angela Merkel and Nicolas Sarkozy said: "The crisis is not over and the labour markets will suffer... over the months to come. Together we must send a message from Pittsburgh that we are fully and firmly resolved to implement our stimulus plans."

The leaders reached outline agreement on curbs to banker bonuses and accused bankers of returning to the "reprehensible practices" blamed for causing the financial crisis.

They proposed binding rules linking bonuses to profits; said bankers should not be guaranteed them every year; and that for "significant" payments there should be a clawback mechanism so bankers would not receive them if deals later went wrong.

Differences remain because France wants to cap the bonuses for individual bankers. Britain believes that is unworkable and wants financial watchdogs to intervene only when banks are paying large bonuses. Mr Brown is prepared to look at linking bonuses to "revenues and/or profits".

Mr Sarkozy said yesterday: "Even the English understand that we have to regulate, we have to limit, and that there are unacceptable scandals."

Privately, there is tension over how and when to start tightening fiscal and monetary policies as countries return to growth at different rates.

The Tories turned their fire on Alistair Darling over his interview in The Independent yesterday in which he called on other countries not to scale back their fiscal stimulus plans yet. Mr Osborne said: "There's a fundamental contradiction at the heart of Alistair Darling's argument. He says that he expects, as we do, that Britain will come out of recession this year and yet he wants to go on with large increases in public spending next year, when he knows the country cannot afford it.

"His position has everything to do with the politics of a looming election and nothing to do with the economic interests of the British people."

But Timothy Geithner, the US Treasury Secretary, backed Mr Darling's stance: "We've come a very long way but I think we have to be realistic, we've got a long way to go still."

Mr Darling stuck to his guns in a speech to the Scottish CBI last night. "I believe we can be confident about our prospects for 2010," he said. "But there are still uncertainties and risks that we have to confront. And the biggest risk is to think that the job's done – that recovery is guaranteed. No country can be complacent. We've got to see this through."

That meant supporting the economy now through targeted public spending, rather than cutting back at this crucial time, and fighting protectionism by kickstarting the stalled world trade talks, he said.

The Chancellor called on the G20 to set a March 2010 deadline for tax havens to meet their international obligations or face tough sanctions.

He said HM Revenue & Customs had requested details of at least 100,000 offshore accounts held at more than 300 institutions. That would mean recouping billions of unpaid tax, with an expected £1bn from a deal with Lichtenstein alone.

*Mr Brown said he would be prepared to take a cut in his £192,250-a-year salary during the recession. He told BBC Radio One: "I'm not in this job for the money. If there was an agreement that we could all do that I would be very much part of that."

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooksA special investigation by Andy McSmith
  • Get to the point
2015 General Election

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Senior Managing Engineer

Negotiable: Recruitment Genius: This leading provider of refrigeration, mechan...

Recruitment Genius: Advertisement Sales Manager

£21000 - £25000 per annum: Recruitment Genius: A publishing company based in F...

Recruitment Genius: Business Development Executive - Affiliates & Partnerships

£20000 - £35000 per annum: Recruitment Genius: This multi-award winning foreig...

Recruitment Genius: Graduate Structural Engineer

£17000 - £22000 per annum: Recruitment Genius: A Graduate Structural Engineer ...

Day In a Page

No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor