Complacency about economic recovery ‘may put UK at risk’
BRITAIN’s future is being put at risk by a ‘creeping complacency’ that the economy is fixed, George Osborne is expected to warn today.
The Chancellor will identify a ‘dangerous cocktail’ of global risks to the recovery, including a sharp fall in stock markets since the start of the year.
His warning that it is by no means ‘mission accomplished’ comes after the pound slumped yesterday to a nine-month low against the dollar.
At the same time, a report by the research group Markit said the economy grew by only 2.2 per cent in 2015 – down from 2.9 per cent in 2014.
Speaking to business leaders in Cardiff, Mr Osborne will say the British economy has performed ‘better than almost anyone dared to hope’ – but if spending cuts are not completed things could unravel.
He will warn: ‘Anyone who thinks it’s mission accomplished with the economy is making a grave mistake.
‘2016 is the year we can get down to work and make the lasting changes Britain so badly needs – or it’ll be the year we look back at as the beginning of the decline. This year, quite simply, the economy is mission critical.
‘Last year was the worst for global growth since the crash and this year opens with a dangerous cocktail of new threats.
‘For Britain, the only antidote to that is confronting complacency and sticking to the course we’ve charted.’
The Chancellor will cite the slowdown in China, problems in Brazil and Russia, the slide in commodity prices, the risk of stagnation and continued tumult in the Middle East as potential hazards.
He will say that strong economic performance like that seen in UK is ‘sadly lacking’ in many other parts of the world, pointing out that the IMF believes world growth in 2015 was the slowest since 2009 – the height of the recession caused by the financial crash.
The Chancellor will add: ‘As we start 2016, I worry about a creeping complacency in the national debate about our economy. A sense that the hard work at home is complete and that we’re immune from the risks abroad. A sense we can let up, and the good economic news will just keep rolling in. Yes, the British economy has performed better than almost anyone dared to hope. And as an issue, the economy has slipped down the list of many people’s everyday concerns.
‘But the biggest risk is that people think it’s “job done”.’
Attacking Jeremy Corbyn and the Labour Party, he will add: ‘Many in our politics encourage this, irresponsibly suggesting that we can just go back to the bad old ways and spend beyond our means for ever more.
‘Though the year is only seven days old, already we hear their predictable calls for billions of pounds more debt-fuelled public spending.
‘They reject all the reforms we propose to deliver better quality public services for less taxpayers’ money.
‘Today I want to issue this warning: Unless we finish the job of fixing the public finances to get Britain back into the black by finally spending less than we borrow, all the progress we have made together could still easily be reversed.’
Mr Osborne and the Government were criticised by the British Chambers of Commerce last night for failing to slash bureaucracy, with director general John Longworth warning: ‘Businesses can’t focus on growing amid a storm of red tape and tax-compliance burdens.’
The BCC warns that a ‘twotier’ recovery in Britain has ‘become further entrenched’ as factories and exporters struggle against global headwinds.
The business lobby group, which represents thousands of companies employing a total of more than five million workers, warned that manufacturing was ‘close to stagnation’.
Mr Longworth said: ‘It is not enough to rely upon consumer spending and the housing market to grow the economy, nor to rely purely on services to drive export growth.’
‘Progress could
be reversed’