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.
Category Archives: Economy
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”.
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.
Britain is chasing an agenda that will scare away business and needs a proper “development plan” to accompany its austerity push, according to Oleg Deripaska, the Russian metals tycoon.
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.