After 13 years of Labour rule that has seen public and household debt rise to unprecedented levels, a new sense of responsibility would be introduced under the Conservatives, the shadow chancellor said.
He laid out eight “benchmarks” for economic health, including a private sector-led recovery that would boost investment and end state-sponsored regional handouts.
He admitted it was “a gamble” to stake his own and his party’s reputation on the pledges, but he said they were vital to ensure economic well-being.
Mr Osborne pledged to promote long-term investment and savings and draw a line under the era of credit and consumerism that had characterised the economic bust.
The Conservatives would cut the £178 billion budget deficit to safeguard our global credit rating, balance the economy so that growth depended on exports, enshrine business-friendly taxes and put in place a safer banking system, he said.
The pledges will be seen as an attempt to replicate the way Gordon Brown sought economic credibility before Labour’s landslide victory in 1997. Mr Brown set his own “golden rules” which were supposed to guide economic policy for a decade, but were ultimately torn up and discredited. In a “New Economic Model” document, Mr Osborne committed a Conservative government to holding an emergency Budget within 50 days of taking office to set out a credible plan for eliminating “in large part” the structural budget deficit over a Parliament.
Labour has said it would halve the deficit over four years, but Mr Osborne is privately convinced that he can go further and faster.
Yesterday’s launch was part of Conservative attempts to counter Labour accusations that the Tories’ economic plans were in disarray, with an apparent lack of detail on when they would try to cut the national debt, and to what extent.
Mr Osborne said: “We cannot go on with the old economic model of the last decade. A model that depended on a public spending boom we couldn’t afford; an overblown banking sector; and unsustainable consumer borrowing off the back of a housing bubble. These were the shaky foundations of the age of irresponsibility that left Britain so badly exposed to this economic crisis.” (AtW's comment: shirly all those house price raises were based on "fundamentals"?)
His eight-point plan included a commitment to ensure Britain did not lose its AAA credit rating, a fear raised repeatedly in recent weeks.
Mr Osborne said he would make Britain a nation of savers after a decade of borrowing. The party would support savers through a range of measures, including the automatic enrolment of workers into pensions for those on middle and lower incomes, restoring the link between the state pension and average earnings, and helping savers who have been hit by the abolition of the dividend tax credit for pension funds.
The public sector would be told to deliver better value for money after years of falling productivity, he said.
Mr Osborne also promised to stop Britain’s regions being almost totally dependent on the public sector. Instead, he wanted to encourage “a vibrant private sector” to wipe out regional imbalances in the economy. He pointed out that in the North West and North East more than 50 per cent of the regions’ economic output is made up of public spending.
The shadow chancellor warned that a drop in Britain’s credit rating could return the country to recession. “That’s why our first Benchmark for Britain is to cut the deficit more quickly to safeguard Britain’s credit rating,” he said. “I know that we are taking a political gamble to set this up as a measure of success. But the economic risk of not setting ourselves this benchmark is not one that I am willing take.”
Liam Byrne, the Chief Secretary to the Treasury, said Mr Osborne had failed “the credibility test” (AtW's comment: it's cracking how the guy in charge of the Threasure has guts to even say word 'credibility') by refusing to explain how the Conservatives would pay the deficit quicker than Labour. Vince Cable, the Liberal Democrat Treasury spokesman, said: “This is the third time the Tories have changed their economic policy in as many weeks. George Osborne’s announcement of eight benchmarks is motherhood and apple pie politics.
“We all want to see a stable, growing economy. The question is how we get there, and on this the Tories have no answers.”
Source: Torygraph
He laid out eight “benchmarks” for economic health, including a private sector-led recovery that would boost investment and end state-sponsored regional handouts.
He admitted it was “a gamble” to stake his own and his party’s reputation on the pledges, but he said they were vital to ensure economic well-being.
Mr Osborne pledged to promote long-term investment and savings and draw a line under the era of credit and consumerism that had characterised the economic bust.
The Conservatives would cut the £178 billion budget deficit to safeguard our global credit rating, balance the economy so that growth depended on exports, enshrine business-friendly taxes and put in place a safer banking system, he said.
The pledges will be seen as an attempt to replicate the way Gordon Brown sought economic credibility before Labour’s landslide victory in 1997. Mr Brown set his own “golden rules” which were supposed to guide economic policy for a decade, but were ultimately torn up and discredited. In a “New Economic Model” document, Mr Osborne committed a Conservative government to holding an emergency Budget within 50 days of taking office to set out a credible plan for eliminating “in large part” the structural budget deficit over a Parliament.
Labour has said it would halve the deficit over four years, but Mr Osborne is privately convinced that he can go further and faster.
Yesterday’s launch was part of Conservative attempts to counter Labour accusations that the Tories’ economic plans were in disarray, with an apparent lack of detail on when they would try to cut the national debt, and to what extent.
Mr Osborne said: “We cannot go on with the old economic model of the last decade. A model that depended on a public spending boom we couldn’t afford; an overblown banking sector; and unsustainable consumer borrowing off the back of a housing bubble. These were the shaky foundations of the age of irresponsibility that left Britain so badly exposed to this economic crisis.” (AtW's comment: shirly all those house price raises were based on "fundamentals"?)
His eight-point plan included a commitment to ensure Britain did not lose its AAA credit rating, a fear raised repeatedly in recent weeks.
Mr Osborne said he would make Britain a nation of savers after a decade of borrowing. The party would support savers through a range of measures, including the automatic enrolment of workers into pensions for those on middle and lower incomes, restoring the link between the state pension and average earnings, and helping savers who have been hit by the abolition of the dividend tax credit for pension funds.
The public sector would be told to deliver better value for money after years of falling productivity, he said.
Mr Osborne also promised to stop Britain’s regions being almost totally dependent on the public sector. Instead, he wanted to encourage “a vibrant private sector” to wipe out regional imbalances in the economy. He pointed out that in the North West and North East more than 50 per cent of the regions’ economic output is made up of public spending.
The shadow chancellor warned that a drop in Britain’s credit rating could return the country to recession. “That’s why our first Benchmark for Britain is to cut the deficit more quickly to safeguard Britain’s credit rating,” he said. “I know that we are taking a political gamble to set this up as a measure of success. But the economic risk of not setting ourselves this benchmark is not one that I am willing take.”
Liam Byrne, the Chief Secretary to the Treasury, said Mr Osborne had failed “the credibility test” (AtW's comment: it's cracking how the guy in charge of the Threasure has guts to even say word 'credibility') by refusing to explain how the Conservatives would pay the deficit quicker than Labour. Vince Cable, the Liberal Democrat Treasury spokesman, said: “This is the third time the Tories have changed their economic policy in as many weeks. George Osborne’s announcement of eight benchmarks is motherhood and apple pie politics.
“We all want to see a stable, growing economy. The question is how we get there, and on this the Tories have no answers.”
Source: Torygraph
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