Changing economic course would put Britain 'in financial turmoil' Osborne

Chancellor defends coalition's deficit reduction plan as Ed Balls accuses government of a political gamble with nation's economy

Britain would be in "financial turmoil" if the coalition abandoned its deficit reduction plan, and has no alternative but to follow it through, George Osborne warned today.

The chancellor said no politician liked cutting spending and raising taxes, but the measures were necessary to clear up the "mess" that the previous Labour government left.

His comments came as his Labour counterpart Ed Balls called for a new economic strategy and described the relentless tax hikes and budget cuts as an "irresponsible and dangerous" political strategy.

Osborne, who has this week been discussing financial issues at the World Economic Forum in Davos, told BBC's The Politics Show: "If on Monday I went to parliament and got up in the dispatch box in the House of Commons and said I am abandoning the deficit reduction plan that Britain set out last year, what do you think the reaction would be?

"Within minutes Britain would be in financial turmoil. I am not prepared to let that happen.

"It requires tough difficult decisions. No politician likes cutting spending and increasing people's taxes, but I was delivered a mess by the previous government and I am trying to clear it up."

The chancellor was last week forced to defend the government's tough austerity measures after statistics showed the UK economy unexpectedly shrank in the fourth quarter.

The severe weather last month triggered a drop in demand for the key services sector, which makes up more than 75% of the economy, sparking a 0.5% plunge in gross domestic product between October and December.

Balls described the figures as "shocking".

Writing in the Independent on Sunday he said: "While George Osborne insists it was the Big Freeze in December that caused the contraction, it is the impending Big Squeeze on family budgets and public services that is driving the collapse! in conf idence and holding back investment."

Balls criticised the chancellor's plan to clear the deficit by 2015, claiming there was "an economically more credible alternative to what this Conservative-led government is doing".

He used the example of the American economy, which saw growth towards the end of last year, saying the UK should follow in the footsteps of its economic policy to get back on a stronger financial footing.

"The fact is that the US treasury secretary is right and George Osborne is wrong," Mr Balls said.

"In the US, there are still big risks and challenges ahead. But supporting job creation, reforming our financial systems and investing in jobs for the future is the best way to get economies moving again and to cut the deficit.

"Simply slamming on the brakes with drastic tax hikes and deep spending cuts is not a credible economic policy."

He continued: "When I hear George Osborne refuse even to countenance the idea of a Plan B, I can see no economic judgment at work at all just a political gamble with the nation's economy. We badly need an alternative and we need it now."


guardian.co.uk Guardian News & Media Limited 2011 | Use of this content is subject to our Terms & Conditions | More Feeds



Comments

Post a Comment

Popular posts from this blog

Top flyer boo-boo : Shut off noisy engines

LONDON: It's too noisy, could you please turn off the engines ? Could you please open the window? These are some of the "foolish" and "bizarre requests" flyers often make to flight attendants, according to a new survey. The survey of some 3,000 Virgin Atlantic cabin crew members found that some passengers fail to understand why they are prevented from opening the window, others think "turning down" the engines could reduce the noise. "Please, can you open the window?" was among the most common unusual queries made by uncomfortable passengers who seem to be unaware of the benefits of a pressurised cabin at 35,000ft. Other unique questions included "could you turn the engines down because they are too noisy?" and "please can the captain stop the turbulence?", the Telegraph reported. The survey also laid bare the level of comfort and service some customers expect, with several asking flight attendants "can you sho...
Keep reading

UK greenhouse gas emissions fall 8.7%

Image
Total UK emissions plummet as recession lowers electricity and fuel use A dramatic fall in greenhouse gas emissions following the recession has brought the UK's climate change targets for the next five years within easy reach, taking the pressure off government and business to comply. Government estimates released on Tuesday showed greenhouse gas emissions fell by 8.7% from 2008 to 2009, the biggest drop since records began in 1990. Carbon dioxide levels plunged 9.8%, a fall only matched in 1980, in records extending to 1970. The unexpectedly deep slump in emissions mirrors the fall in industrial output in the recession, with high-emitting sectors including construction and transport hit particularly hard. But it also means that government-set climate change targets of cutting emissions by 35% by 2020, compared with 1990 levels, now look much easier to meet. The UK has already met the targets for 2016, provided emissions stay at 2009 levels. This raises the prospect that business...
Keep reading

Dogs can be trained to sniff out bowel cancer, Japanese researchers say

Image
Experiments show that labrador retriever's sense of smell can identify minute traces of chemicals circulating in human body Dogs can be trained to sniff out bowel cancer, even when the disease is in its early stages, researchers in Japan claim. In a series of experiments that involved sniffing the breath or stool samples of patients, a specially-trained labrador retriever proved nearly as good at identifying those with cancer as a conventional colonoscopy examination. The team, led by Hideto Sonoda at Fukuoka dental college hospital, said some dogs have such a keen sense of smell that they can detect minute traces of chemicals that appear to circulate in the bodies of people who have cancer. The finding builds on previous experiments in which researchers used dogs to sniff out cancers in the skin, lungs, bladder and ovaries. Writing in the journal Gut , the researchers describe how the eight-year-old dog was trained to distinguish between the smell of a patient with colorectal canc...
Keep reading