Alistair Darling: Restoring growth has to be the Government's top priority for now

A year ago, the world banking system and the global economy were staring into the abyss. Today, the financial system is more stable. Confidence is returning across the world economy, in a way few would have thought possible at the beginning of this year.

The past year has shown that, even in a globalised world, governments can make a real difference. It's precisely because we took radical action a year ago that there is more confidence today. The battle to stop recession becoming global depression is being won. But we must be ready to face a new challenge – to secure long-term sustainable growth. That, of course, needs a functioning market for credit. So we will continue to put in place tough practical measures to strengthen the banking system and protect the public interest. Only yesterday Finance Ministers agreed to further reform the regulatory system in Europe.

The decisions we make over the next year will define our prospects for the next five to 10 years. And make no mistake, we do have a choice. We can resign ourselves to a decade of austerity, low growth and low employment. Or we can embrace change, turn it to our advantage, and seize the huge opportunities a global recovery will bring.

To do that, we must complete the reform of the financial system and see through the recovery. And as we come through recession and rebuild our fiscal strength, we must now secure the growth that will create jobs for our children and grandchildren.

That is entirely possible, but only if we make the right decisions. Three steps are needed. First, we must support the economy until we're sure the recession is over. Second, equally important, is to rebuild our fiscal strength in the medium term. The third, and crucial, part of our strategy for the economy is growth.

Not only is growth the best way of creating jobs and increasing prosperity – it is also the best way to earn the money to pay down debt. We need growth, because when we grow, the economy becomes bigger, we all become richer as a country, and it gets easier to pay back debt. To make the wrong choices, to refuse to invest, will simply mean that the economy gets smaller, we all get poorer, and even greater and deeper cuts are needed.

Taken from the Chancellor's speech to the Reuters news agency in London yesterday