Category Archives: George Osborne

George Osborne accused by Tory MP of running the UK ‘just like’ Gordon Brown – Telegraph

Douglas Carswell, the MP for Clacton, has written an article for The Daily Telegraph’s website in which he demands that the Chancellor gets the economy “back on track” by making major tax cuts, liberalising planning laws and scrapping five Whitehall departments.

It will pile pressure on Mr Osborne, who has recently faced rumours of a parliamentary plot to oust him.

Mr Carswell said he does not think that the country needs a new Chancellor, but that Mr Osborne needs to dramatically change course in order to turn around the flagging economy.

George Osborne accused by Tory MP of running the UK ‘just like’ Gordon Brown – Telegraph.

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UK deficit reduction will need big tax rises after next election, experts warn | Business | The Guardian

Britain’s leading experts on public finances have warned of hefty tax increases in the first budget after the 2015 election as the next government seeks to repair a £64bn deficit caused by a stuttering economy.

The Institute for Fiscal Studies said tax rises of £10bn-12bn might be needed in the next parliament to put deficit reduction back on track and to avoid “eye-watering” cuts in some Whitehall departments that would reduce spending by a third in inflation-adjusted terms between 2010 and 2018.

Paul Johnson, the thinktank’s director, said it was not impossible for the government to achieve its deficit reduction target entirely by cutting departmental spending but it would be “very, very difficult indeed”.

UK deficit reduction will need big tax rises after next election, experts warn | Business | The Guardian.

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Now even Goldman Sachs tells Osborne to find a Plan B – UK Politics – UK – The Independent

George Osborne was urged last night to rethink his deficit-reduction programme by a chorus of economic experts from across the political spectrum as the UK teetered on the verge of a triple-dip recession.

Britain moved a step closer to losing its AAA credit rating with new figures revealing the economy did not grow at all over 2012 – prompting experts who had previously backed the Chancellor’s austerity measures to urge a change of course. Yesterday’s worse-than-expected GDP figures showed the British economy actually contracted by 0.3 per cent in the final quarter of last year.

Jim O’Neill, chairman of Goldman Sachs Asset Management, said the contraction showed that “policy has been on the wrong path” and that fiscal policy had been “tightened too much” by the Chancellor.

Now even Goldman Sachs tells Osborne to find a Plan B – UK Politics – UK – The Independent.

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Boris Johnson urges Osborne to drop ‘hair shirt’ agenda for UK economy | Business | guardian.co.uk

Boris Johnson urges Osborne to drop ‘hair shirt’ agenda for UK economy | Business | guardian.co.uk.

Boris Johnson has called on the government to drop its “hair shirt, Stafford Cripps” agenda as he outlined a seven-point growth plan for London involving building thousands of new homes and investment in major infrastructure projects.

Speaking at a British business lunch in Davos on Friday shortly after therelease of figures showing the economy was again contracting, the mayor of London said it was time to “junk the rhetoric of austerity” and instead take steps to boost confidence and spending.

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Britain heading for triple-dip recession as GDP shrinks 0.3% in fourth quarter | Business | guardian.co.uk

http://www.guardian.co.uk/business/2013/jan/25/uk-triple-dip-recession-gdp?CMP=twt_fd

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Time for Plan B in Britain, IMF chief economist Oliver Blanchard tells George Osborne – Telegraph

Mr Blanchard told Radio 4’s Today programme on Thursday that conditions in the country had worsened – yesterday the fund cut its forecasts for UK growth to 1pc this year – and he thought the March Budget would be a “good time to take stock”.

“We said that if things look bad at the beginning of 2013 – which they do – then there should be a reassessment of fiscal policy,” he said, adding that the fund’s advice to Britain has not fundamentally changed.

Time for Plan B in Britain, IMF chief economist Oliver Blanchard tells George Osborne – Telegraph.

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Cameron’s EU strategy in tatters once again

11 January: The Guardian reports that David Cameron faces humiliation over the EU as Germany chances its stance on treaty renegotiation that the PM sees as crucial to Britain’s continued membership.

It comes as opposition MPs and even some of his senior coalition partners question the wisdom of Cameron’s stance, and call into question the words of George Osborne who earlier this week said that Europe must change if Britain was to remain a member – which caused an ally of Chancellor Merkel to accuse the UK of “blackmailing” Europe.

The leader of the Conservative MEPs warned that strident Euroscepticism was in danger of giving the impression of Britain “snarling like a pitbull across the Channel”. Richard Ashworth told a seminar organised by the Business for New Europe group and the European parliament: “We’re raising the tempo so that expectations are becoming too great.” He warned that Britain was making itself “pretty unattractive and difficult to work with”.

Vince Cable was equally critical:

Vince Cable, the business secretary, showed Liberal Democrat unease about the prime minister’s plans which he described as a “massive disruption”. He said: “I have to say that this whole issue of raising again in a fundamental way British membership and the terms of membership is a massive disruption and deeply unhelpful in my job. I have to spend my time talking to business people, British and international, trying to have the confidence to invest here and create employment and the recent uncertainly is just deeply uncomfortable for the country. I think the warning shot across the bows yesterday from the United States was actually quite helpful as well as very timely.”

http://www.guardian.co.uk/politics/2013/jan/11/cameron-merkel-eu-treaty

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Another blow for the economy as GDP shrinks 0.3%

11 January: The Daily Telegraph reports that the National Institute of Economic and Social Research, which has earned a reputation for accuracy, has forecast that the economy contracted by 0.3% in the last quarter of 2012, meaning that over the year as a whole the economy was flat.

The figures will come as a blow to George Osborne, who has repeatedly claimed that his strategy is working and that there is no need for a “plan B”.

“It’s a disappointing set of data. We had thought that we might see a bounce back in manufacturing output over the month, but what we saw instead was a further contraction,” said Philip Shaw, an economist with Investec in London.

“Most of the official data are suggesting weakness over the fourth quarter.”

That would be further bad news for a government struggling to convince voters and economists that it can get the economy back on to a growth track while cutting public spending to reduce the budget deficit.

http://www.telegraph.co.uk/finance/economics/9796123/UK-GDP-shrank-0.3pc-in-fourth-quarter-says-Niesr.html

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AAA credit rating under threat

5th January: The Daily Mail reports that Britain’s prized AAA credit rating is under threat as borrowing costs rise and the economy struggles.

The warning came as Britain’s fragile economy lurched towards an unprecedented triple-dip recession in a major setback to George Osborne. A gloomy report suggested the economy shrank by 0.2 per cent between October and December – leaving Britain on the brink of a third recession in just five years.

In a further blow to the Chancellor, UK borrowing costs climbed above those in France for the first time in nearly two years amid mounting fears over Britain’s debts and AAA credit rating.

http://www.dailymail.co.uk/news/article-2257458/Interest-rates-remain-rock-years-economy-struggles-recover.html

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Child benefit plan branded “incoherent”

4th January: The Daily Mail and others reported that the Institute for Fiscal Studies has warned that some households face losing £1300 per year thanks to chancellor George Osborne’s “incoherent” clawback of child benefit.

http://www.dailymail.co.uk/news/article-2257083/Middle-class-families-face-paying-65-tax-rate-Osbornes-incoherent-clawback-child-benefit-IFS-warns.html

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