Osborne: We’re turning a corner
Supporters of Plan B ‘have lost the argument’
BRITAIN’S economy is ‘turning a corner’ and making a sustained recovery from Labour’s ‘ Great Recession’, George Osborne will say today.
The Chancellor will hail ‘dramatic improvement in financial conditions’ in recent months, in his most upbeat assessment of Britain’s economic outlook since the election.
In a speech to economists, he will say the recovery has ‘decisively ended’ debate over whether the country should heed Labour’s call to abandon spending cuts and switch to a ‘Plan B’. He will also dismiss warn-
‘The plan is working’
ings that the recovery is being driven by an unsustainable consumer boom.
Signs of growth vindicate the Coalition’s decision to stick with its austerity programme – which still has years to run – despite intense pressure from Labour and left-wing economists to drop it.
He will say: ‘The plan is working, but more years of hard decisions lie ahead. Our economy is turning a corner, but we must not take anything for granted.’
Taking aim at Shadow Chancellor Ed Balls and others who have called for a spending spree to boost growth, Mr Osborne will say: ‘Those in favour of Plan B have lost the argument.’
He will point out that Britain’s growth, now forecast to be the best in the developed world in the second half of this year, has happened at the same time as the programme of cuts. ‘Government spending cuts have continued as planned, and yet growth has accelerated and many of the leading economic indicators show activity rising faster than at any time since the 1990s,’ he will say.
Mr Osborne will say that it was external factors, such as the eurozone crisis and soaring commodity prices, which had held back growth since the election, rather than the programme of austerity.
He is also expected to pledge that all sections of society, and all parts of the country, will benefit from the recovery.
His bullish tone reflects growing confidence the economy is on course for a sustained recov- ery in the run-up to the next election. In the three months to June, it grew by 0.6 per cent – double the figure in the previous three months, and the respected OECD think-tank last week upgraded its 2013 growth forecast for the UK from 0.8 per cent to 1.5 per cent. One senior Government source said the UK was now out of the ‘European bucket’, with growth prospects comparable to those of the US.
The Chancellor will say there is evidence of a ‘broad-based and sustainable recovery’, with business surveys suggesting all sectors of the economy are enjoying growth, and that only half of the growth this year was driven by consumer spending.
But he will warn: ‘More tough choices will be required after the next election to find many billions of further savings, and anyone who thinks those decisions can be ducked is not fit for government.’
But Ed Miliband will use his speech to the Trades Union Congress tomorrow to say: ‘Living standards have been falling for longer than at any time since 1870. Only the privileged few are feeling better off.
‘This is an unfair recovery. This is an unequal recovery. And an unequal recovery won’t be a stable recovery.’