UK Chancellor Darling delivers bleak assessment

Britain’s economic downturn will be “more profound and long-lasting” than expected amid the worst global economic conditions for 60 years, Alistair Darling warned.

The Chancellor also admitted that ministers were partly to blame for voters’ frustration because they had “patently” failed to explain the problems.

The comments are the British government’s grimmest assessment yet of the situation, and come after a Bank of England policymaker warned that unemployment could hit two million by Christmas.

In a candid interview with The Guardian, Mr Darling said that the economic times faced by Britain and the rest of the world “are arguably the worst they’ve been in 60 years”.

Emphasising the gloom, he adds: “I think it’s going to be more profound and long-lasting than people thought.”

Mr Darling said the government had its “work cut out” to persuade the public that it deserved another term in power.

“This coming 12 months will be the most difficult 12 months the Labour Party has had in a generation, quite frankly,” he said. “We’ve got to rediscover that zeal which won three elections, and that is a huge problem for us at the moment. People are pissed off with us.

“We really have to make our minds up; are we ready to try and persuade this country to support us for another term? Because the next 12 months are critical. It’s still there to play for.”

The Chancellor played down the prospects of an early reshuffle by Gordon Brown, and speculation that he could lose his job when the prime minister does shake up his team.

“You can’t be chopping and changing people that often,” he says. “I mean, undoubtedly at some stage before the end of the Parliament he will want to do a reshuffle, but I’m not expecting one imminently. I do not think there will be a reshuffle.”

Mr Darling’s opinions are bound to be controversial because they are far more negative than those stated by Mr Brown in public. He also admitted that the PM has struggled in some ways.

However, the Chancellor stressed that Mr Brown was one of his oldest friends, and he has confidence in his abilities.

Asked whether Mr Brown can communicate Labour’s mission effectively, he insisted: “Yes, I do think he can. I do think he will.”

He added: “Er, well. Well, it’s always difficult, you know... But Gordon, in September, up to party conference, has got the opportunity to do that. And he will do that.

“It’s absolutely imperative.”

The intervention came after David Blanchflower, a member of the Bank of England’s Monetary Policy Committee, suggested that unemployment could soon rise to two million as construction workers and banks shed jobs.

Shadow Chancellor George Osborne said: “Who is telling the truth at the top of Government?

“The prime minister says the economic situation isn’t as bad people think and that Britain is well placed to weather the economic storm, but the Chancellor says we are at a 60-year low.

“Gordon Brown has briefed out stories that he has an economic recovery plan all worked out, meanwhile the Chancellor says the downturn will be more profound and long-lasting than people thought.

“It’s not clear whether Alistair Darling meant to tell us the truth about the mess 10 years of a Labour Government has left our economy in, but he has certainly let the cat out of the bag.”

Liberal Democrat Shadow Chancellor Vince Cable said: “The government is finally being honest with itself and with the British public about the scale of the problem and recognises that the British economy is not simply a victim of external events.

“The next step must now be for the government to admit that those aspects of the economy which it believed were its sources of strengths are now clearly its weaknesses.

“The British financial sector is exceptionally large and has therefore been disproportionately hit by the collapse in financial confidence which shows no sign of ending.

“It was always a severe mistake to believe that the bubble was a means to long-term prosperity and it is going to take a long time for the economy to return to a semblance of normality.

“The Chancellor now urgently needs to come up with a clear recovery plan honestly based on what is realistically possible.”