Alistair Darling has ruled out an immediate clampdown on tax privileges used by the private equity industry, fearing that any sudden changes might have undesirable effects on the “absolutely critical” role the City plays in the economy.

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Lionel Barber on the first press interview with the new chancellor

In his first press interview, the new chancellor also made clear his determination to join the battle against the economic strategy for Europe espoused by Nicholas Sarkozy, the new French president, who questioned the value of open competition. Mr Darling said: “I do not believe in economic patriotism. I think it is nonsense. Economic patriotism is protectionism and there is no other name for it.”