09/09/2013 11:35:00

UK's Osborne Claims Victory in Austerity Debate

LONDON--Treasury Chief George Osborne said Monday the U.K.'s economy is "turning the corner," vindicating the government's commitment to pushing ahead with austerity measures.

In his first speech on the economy since signs emerged of a significant pickup in growth from the three months to June, Mr. Osborne will say that to change course now and abandon his program of spending cuts would be disastrous.

The austerity program--which has seen spending cuts and tax rises implemented to try to close the country's huge budget gap--has been the government's cornerstone policy since it came into office in 2010.

But the program has been severely criticized by opposition lawmakers, trade unions, and some business groups and economists, who argued that overly aggressive spending cuts had suffocated growth. Opponents of austerity pushed for a so-called "Plan B" that would take a more moderate approach to correcting the public finances.

After barely growing since 2010, the U.K. economy has this year begun to show tentative signs of life and in recent weeks a run of strong economic data and surveys have indicated a recovery is finally underway.

During his speech at a construction site in east London, Mr. Osborne said that this positive data flow "decisively" ends the debate in favor of his belief that austerity measures coupled with loose monetary policy are the correct remedy for the British economy.

"The evidence increasingly suggests that our macroeconomic plan was the right one and is working," Mr. Osborne said. "Those in favour of a Plan B have lost the argument."

Mr. Osborne also cautioned that the recovery is still in its early stages, and many risks remain, namely the slowdown in emerging markets; the possibility of further turbulence in the euro zone; and the risk that instability in the Middle East will push up oil prices.

"We remain vigilant on all fronts, and our economic plan gives us the resilience and stability we would need if any of these risks were to materialize," Mr. Osborne said. "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."

The Treasury chief also refuted claims the U.K. is returning to debt-fueled, consumption-led growth, saying the economic data point to a balanced, broad-based and sustainable recovery.

Mr. Osborne said the Bank of England's Financial Policy Committee, the financial and stability watchdog, now has the tools to act if it spots areas of the economy where imbalances are emerging.

Chris Leslie, treasury spokesman for the opposition Labour Party, said Mr. Osborne's speech was a "desperate attempt to rewrite history."

"With prices still rising faster than wages, working people are on average 1,500 pounds [$2,343] a year worse off than in 2010. The last thing they want to hear is complacent and out-of-touch boasts that the last three years have been a success," Mr. Leslie said.

Write to Ainsley Thomson at ainsley.thomson@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

September 09, 2013 06:35 ET (10:35 GMT)

Copyright (c) 2013 Dow Jones & Company, Inc.

Post comment

Related debate

  • 1 week
  • 1 month
  • 1 Year
15 Sep
VWS
  Her er lidt at tænke over for en enhver Vestas aktionær!   Den 6. nov. 2012 var der valgdag i USA ..
40
17 Sep
 
Jeg har lagt mærke til, at det er de samme personer, der igen og igen er negative til stort set alt...
23
14 Sep
DLH
Den 105 år gamle historie om den tidligere storhandler af tropisk træ, Dalhoff, Larsen og Horneman, ..
23
15 Sep
FING-B
Så stop dog for pokker med alt det sædvanlige fnidder fnadder og forstå at dette debatforum stensikk..
14
14 Sep
DLH
Udemærket opdatering på casen, Stockwatch. Et par kommentarer dog;   De laver et negativt EBIT på c..
13
17 Sep
MAERSK-A
Jeg er enig med jer begge i det meste. Problemet er bare at mange forsøger at slå markedet ved at fi..
12
17 Sep
DANSKE
6212?
12
17 Sep
 
Jeg tror du tager fejl. 90 % af brugerne på EI ved i realiteten intet om økonomien i de selskaber de..
12
18 Sep
VELO
Jeg tog lige et genhør med svarene på dette spørgsmål i den telekonference, som Veloxis afholdt i fo..
11
13 Sep
VWS
Det er nu dig der er et sludrehoved, 6212, fuldstændigt lige som forleden da du VIDSTE at Juan Aralu..
10

Tech Companies Send Criticism Along With NSA-Related Data -- Update

04/02/2014 00:06:00
By Danny Yadron Technology companies including Google Inc. and Microsoft Corp. released new figures on the amount of data requests they received from U.S. ..

U.S. Hot Stocks: Hot Stocks to Watch

03/02/2014 14:07:00
Among the companies with shares expected to actively trade in Monday's session is Herbalife Ltd. (HLF). Herbalife Ltd. (HLF) raised its fourth-quarter outl..

Pfizer Study Meets Primary Endpoints

03/02/2014 13:05:00
Pfizer Inc. (PFE) said Monday that a Phase 2 trial of its advanced breast cancer treatment met its primary endpoint. Pfizer said a study comparing the effec..

Most read news

  • 24 hours
  • 48 hours
  • 1 week
1
Novartis data in The Lancet Oncology show LBH589 offers 4-month increase in median PFS for patients with multiple myeloma
2
Cerner Receives Regulatory Clearance for Acquisition of Siemens Health Services
3
Lemminkäinen announces preliminary results of the rights offering
4
EPH will announce 2014 Half Year Interim Financial Information on Monday, 22 September 2014
5
Derivatives – New Strikes Stock Products 185/14
Euroinvestor around the globe: Euroinvestor.dk | Euroinvestor.se | Euroinvestor.no | Euroinvestor.fr | Forexinvestor.com| Wisselkoersen.nl | Valuta.se | Valutaveksel.no | Divisas.es | Valute.it
Copyright Euroinvestor A/S 2014   Disclaimer and Terms of Use
Quote information is delivered by Interactive Data.
Data is delayed 15-20 minutes according to the distribution agreements set by the different exchanges.
 
20 September 2014 00:54:50
(UTC) Dublin, Edinburgh, Lisbon, London
Version: LiveBranchBuild_20140919.1 - EUROWEB6 - 2014-09-20 01:54:50 - 2014-09-20 00:54:50 - 1000 - Website: OKAY