Darling: 'UK Economy On The Mend'

Chancellor Alistair Darling has said there is "growing evidence" Government measures have stabilised the banking system and the economy.

Giving a speech at Mansion House to the City, Mr Darling said he was "confident" there will be a sustained recovery in the UK economy.

But Mr Darling added: "We need to learn the lessons from the events of the last 18 months, and make sure they are never repeated."

The Chancellor called for a change of culture in the City.

He said: "Bank boards must have the right people and the right skills and experience to manage themselves more effectively.

"And they need to be equipped to ask the right questions.

"Their focus must be long-term wealth creation, not short-term profits."

But Mr Darling did not single out banks in his criticism of the system.

He echoed calls made earlier by the Governor of the Bank of England, Mervyn King, saying governments and regulators must also learn lessons from the global downturn.

The Chancellor said: "What is now needed is a renewed partnership between Government and industry.

"If we encourage investment, promote research, exploit our science base, and the skills of our people - we will become a more productive economy."

Earlier, Mr King said the Government must produce a plan to repay national debt.

He said: "Five years from now national debt, as a proportion of national income, is expected to be more than double its level before the crisis.

"So it is also necessary to produce a clear plan to show how prospective deficits will be reduced during the next Parliament, so returning to a gradually declining path for the ratio of national debt to national income."