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September 15, 2010    

Bank governor faces grilling from union leaders

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by Kay Murchie

Bank of England governor Mervyn King has today faced questions from union leaders over Government spending cuts.

Mr King became only the second governor in history to address the Trades Union Congress (TUC).

Earlier this week, it was revealed that the tough austerity measures introduced by the coalition Government are set to lead to industrial action following the TUC gathering.

Mr King sought to calm union leaders over the austerity measures - which are deemed necessary by the coalition Government due to a decade of overspending.

Chancellor George Osborne has previously defended his Government’s painful cuts and said if action is not taken, we will find our country on the “road to ruin”.

Meanwhile, in his speech today, Mr King told delegates: “Recent times have indeed been turbulent. After a decade-and-a-half of stability, with rising employment and living standards, came the crisis and recession - the biggest economic upheaval since the Great Depression.

“Before the crisis, steady growth with low inflation and high employment was in our grasp. We let it slip - we, that is, in the financial sector and as policy-makers - not your members, nor the many businesses and organisations around the country which employ them.

“And although the causes of the crisis may have been rooted in the financial sector, the consequences are affecting everyone, and will continue to do so for years to come,” said King.

He added: “It is vital for any government to set out and commit to a clear and credible plan for reducing the deficit.”

Mr King also went on to say the massive banking bailout as “unfair” and acknowledged calls for multi-billion-pound tax evasion to be dealt with when he addressed union activists.

However, Rail Maritime and Transport leader, Bob Crow, who boycotted the speech, said earlier Mr King was not welcome at the conference and dubbed him as “the devil”.

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