Tax haven crackdown spearheads Labour fightback

Chancellor Alistair Darling renewed his attack on offshore tax havens at Labour's Brighton conference after spelling out proposed new legislation enforcing a crackdown on bankers' bonuses and compelling governments to move towards balancing their books.

He was attempting to take the sting out of warnings that there will have to be cuts in spending "to keep public finances on a sustainable path" by detailing measures seen more as political gestures than practical law-making.

He said the proposal for a new Fiscal Responsibility Act would "require that the government reduces the budget deficit year on year, ensuring that the national debt remains sustainable in the medium term".

He assured the party this would be done "rationally" and "not driven by dogma " and nothing like the Tory approach which "is naive and downright dangerous" and would be detailed in the autumn Pre-Budget Report which would protect public services while bringing the deficit down.

His banking legislation, also in the Queen's Speech setting out the programme for the last few months before the general election late spring, would ensure there will be "no return to business as usual" for the bankers.

He said: "In the next few weeks we will introduce legislation to end the reckless culture that puts short-term profits over long-term success.

"It will mean an end to automatic bank bonuses year after year. It will mean an end to immediate pay-outs for top management.

"Any bonuses will have to be paid over years, so they can be clawed-back if not warranted by long term performance.

"We won't allow greed and recklessness to ever again endanger the whole global economy and the lives of millions of people."

His tax promises added little to details already announced in the Budget, spearheaded by "removing unfair pensions relief for higher earners and raising the top rate of tax for the very highest incomes because it is right that those who earn the most should shoulder the biggest burden".

He added: "To make sure people can't avoid paying their fair share, we and other countries are cracking down on offshore tax havens.

"We've already demanded details of over 100,000 offshore accounts, and this will mean billions of extra unpaid tax returning to our country, with an expected £1billion from our agreement with Lichtenstein alone."

He contrasted this with the Tories' "priority" which he said was "to cut inheritance tax for some of the richest families in the nation.

Mr Darling made no direct response to the Liberal Democrat conference plan for a

0.5% tax on the value of properties in excess of £1m.