Osborne tries to win back trust after 'wobble' on spending cuts
Shadow Chancellor says safeguarding Britain's credit rating will be his priority
George Osborne invited voters to judge an incoming Tory government on an eight-point "contract" on economic policy yesterday but refused to spell out how deeply the Conservatives would cut public spending this year.
The Shadow Chancellor laid out eight key "benchmarks" but came under pressure from business leaders to reveal more detailed proposals on cuts. He admitted he was taking a "political gamble" by making his first priority to safeguard Britain's AAA credit rating on the international markets because some investors believe there is an 80 per cent chance of a downgrade. His pledge could backfire spectacularly if Britain were downgraded soon after a Tory election victory.
In a keynote speech, Mr Osborne sought to steady Tory nerves after David Cameron admitted the party would not make "swingeing cuts" in the 2010-11 financial year. Although the Tories deny a U-turn, the move was seen as a tactical retreat because big cuts later this year might have put the fragile economic recovery at risk.
In a shift away from previous Tory warnings about an "age of austerity," Mr Osborne outlined a "new economic model" to secure growth. He promised a "more solid" private sector recovery driven by investment and exports, instead of the consumer borrowing and government debt seen under Labour.
"We will set out a plan in our first Budget to eliminate a large part of the structural deficit in the first Parliament. We will make a start in 2010," he said. But under repeated questioning from journalists, he declined to put a figure on this year's cuts. He said £1.5bn of savings he trailed last autumn were "examples" of cuts but refused to say whether that would be the final figure for 2010-11. Tory officials insisted the party would cut faster than Labour.
The Shadow Chancellor said people should hold a Tory government to account against the eight benchmarks. The others are: creating a more balanced economy; to "get Britain working" by reducing youth unemployment; easing tax and regulatory burdens on business; raising the private sector's share of the economy; boosting the productivity of the public sector; creating a safer banking system and a "greener economy" by cutting greenhouse gas emissions and winning a larger share of global markets for low carbon technologies.
Mr Osborne said the Tory blueprint had won the backing of several prominent businessmen including Sir Stelios Haji-Ioannou, founder of easyJet; Stephen Murphy, chief executive of Virgin Group and Andrew Witty, chief executive of GlaxoSmithKline.
Business groups welcomed the Tory plan but called for more clarity on cuts. Richard Lambert, director general of the CBI, said: "Business will now want to see more detailed plans explaining how these proposals could be delivered, and over what sort of timescales."
Tory policy: The eight-point plan
1. Macroeconomic stability Preserve Britain's AAA credit rating by eliminating a large part of the structural deficit over a parliament. Verdict: Gamble. More details needed on cuts.
2. A more balanced economy Create conditions to boost exports, business investment and saving as a share of GDP. Verdict: Harder with a slimmed-down financial sector.
3. Get Britain working Reduce youth unemployment and the number of children in workless households. Verdict: Where's the money coming from?
4. Britain open for business Improve UK's international rankings for tax competitiveness and business regulation. Verdict: Easier said than done.
5. Ensure the whole country shares in rising prosperity Raise the private sector's share of the economy in all regions, especially outside London and the South-east. Verdict: At odds with Tory pledge to end "top-down" government.
6. Reform public services Deliver better schools and a better NHS. Verdict: harder when budgets are cut.
7. Safer banking system Reform bank regulation and structure. Verdict: Good – but banks will fight their corner.
8. Greener economy Reduce UK greenhouse gas emissions and increase share of global markets for low-carbon technologies. Verdict: Same as Labour.
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Comments
they should have stuck to the deep cuts line and held their nerve because everyone in this couuntry down to the smallest child knows that we are bankrupt and have cut spending.
By taking fright and changing tack they have made fools of themselves and us and probably condemned us for................. get your gun- 5 more years of Gordon Brown, in which event put it your mouth and pull the trigger
If labour do manage to win, against almost surreal odds, I would probably have to follow hakies advice...
Osborne has called it wrong - and badly advised Cameron - especially since the banking crisis/credit crunch of 2008.
He is undermining the pound, provoking a sterling and credit crisis, making it worse for the British economy and destroying the credibility of the city.
Cameron lacks leadership by keeping fool Osborne in place. Cameron would be irresponsible in not shuffling his cabinet and making Osborne responsible for agriculture.
Why do I get the feeling that they will try to achieve this by driving down the pay and conditions of the working men and women of this country creating even more job insecurity than we have now.
Oh yes - because that is what they attempt to do every time they are in office.
Typically Mr.Grice's headliner is again misleading.
Let's have the entirely trustworthy, champaign swilling, luxury yacht dweller Osborn for the next few years, eh bygarie !
Also, intend to introduce the Lyons Report on revaluation of property for Council tax purposes on 1st June. That will see another massive hike in tax.
This country has come to expect that the PM is a media-friendly front man but the Chancellor has to know about economic management, whatever policy beliefs he/she might have.
The electorate must be getting a little short on patience as Osborne isn't showing much grasp of economics. Just think, he was only eight years old when Thatcher came to power. Not sure if people are happy to turn everything over to someone who was Michael Howard's third choice for Shadow Chancellor.
What bothers me is the Mr Osborne's aspiration to preserve our currently abnormal interest rate landscape. Both the deficit and the low interest rates are part of the the response to the crisis. We are being asked to choose between a doctor who says he will reduce the patient's medication before taking him off the respirator, and one who says he will take him off the respirator before reducing the medication. Mr Osborne's problem is that in this fight he has voluntarily chosen the losing hand - interest rates are not set by the Chancellor. They are nominally set by the MPC, but actually set by the Fed, who are unlikely to time the global sea change in interest rates to suit the British Chancellor's hopes.
It is amusing to see Camerons simple minded and patronising presentation falling apart though. Not a class act Cameron - not really officer material old boy. A marketing presentation thats now appearing to be transparent. Oh dear. Blag sussed out. Old school tory (expletive) after all. Like wot Mandelson would like to be..especially the money part. I know, forget love and honour, lets make Mandelson PM!...then we'd really see some real evil by blighty on the world stage!....and in your lives of course you lucky little punters! CCTV in every home linked to an on line anti paedo database survaylance op. You've got nothing to hide if you're doing nothing wrong citizen. Play the game, consume and 'you'll be allright'.
Osbourne is like the ridler character in Batman - greasy and untrustworthy..again, not a class act. Darling I think is quite good, maybe its the Outer Hebridies laidbackness..worth picking up on some of the speaking tricks used by these guys, kids, if not the meaning of what they are saying/doing. Look, we've got a real situation here. Eco Earth Crisis. Haiti for real, in you personal reality coming your way. (type thing). Hair shirts? No, just transcendance of material consciousness...but that implies implosion of GDP! Yes, because manic consumerism is trashing Mother Earth, weirdo. So stay outa my head, stop trying to break liberated awareness and in fact start having some respect for such.
Wiki.
The good old free market, eh? Post- 1979 Toryism at its finest. Yes, it's alright when you're on the winning side with house price going through the sky, pension dividends rocketing, interest on savings soaring. Don't give a thought to the thousands who lose out to your greed. Not so funny when you lose out to even greedier bastards than you.
Please give me a clue that Cameron and Osborne are a different kind of Tories.
Well said, with some feeling.
Bravo, made me smile...
Whether you like it or not, the last three months have been pretty well according to what Brown and Darling were saying a year ago.
Thanks to Gordon Brown reducing the massive debt we had inherited from the Tories we wouldn't have been able to get this far. Without a credible manufacturing base (you know, that thing that made Britain 'Great'), this country had most of its eggs in the global financial services basket and was at the mercy of the US-led collapse. See Barack Obama for more details on that if you think it was caused by and was preventable by Gordon Brown and the relatively puny UK.
How to deal with it was either borrow money to provide jobs so that most of the country can keep working and buying goods, or shut down spending and have a revisit of the last two recessions with the mountain-high unemployment (at �64 per week JSA that's cheap on the Government), but businesses and shareholders protecting their profits. Both approaches have their supporters.