Cuts 'needed to avoid debt crisis'

Britain could face the same problems as Portugal unless the record deficit in the public finances is dealt with, George Osborne warned today.

The Chancellor said he would not play "Russian roulette with Britain's national sovereignty" by risking a debt crisis in the UK.

Addressing the British Chambers of Commerce annual conference in London, he said that the UK needed to "step up a gear" to catch up with its international competitors after years of falling behind.

Mr Osborne said the announcement by the Portuguese government that it was seeking a bailout by the European Union showed why the Government had had to take action to tackle Britain's deficit.

"Today of all days we can see the risks that would face Britain, if we were not dealing with our debts and paying off our national credit card," he said.

"These risks are not imaginary - they are very, very real. Those in our country who deny the urgent need to deal with our deficit are playing Russian roulette with Britain's national sovereignty. I will not do that.

"We have brought credibility where there was doubt and stability where there was none. The real practical economic benefits of this Government's policy are there for businesses and families every day.

"We now have almost the same market interest rates as Germany despite having a bigger budget deficit than Portugal, Greece and Spain."

Mr Osborne said the Government was "unashamedly pro-enterprise, pro-business and pro-aspiration" and that a "central objective" was to restore UK competitiveness after years of decline.

"Over the past decade Britain fell behind, our economy became too unbalanced, while other countries made themselves more competitive," he said.

"Too much debt, not enough savings. In many regions, too big a public sector and too small a private sector. Too many imports compared to too few exports.

"The household savings ratio plummeted. Manufacturing halved as a share of our economy. Between 2000 and 2009 Britain's share of world exports fell by a third, while Germany's share actually rose.

"We need to step up a gear. Britain needs to out-compete, our-smart and out-pace the rest of the world."

The Chancellor warned there was still a need to fight the "forces of stagnation" which he said would try to stand in the way of the "forces of enterprise".

He highlighted opposition to the Government's reforms of the industrial tribunal system, with fees to deter "vexatious" claims, compulsory arbitration, and only allowing employees to bring a claim after two years with a firm rather than one.

"These are controversial measures. The unions oppose them. The Labour movement opposes them," he said.

"So I say to you - to the business community - don't stand on the sidelines. Get involved and help us make the argument for enterprise. An enterprising Britain cannot be built by government alone."

During a question-and-answer session with BCC delegates later, Mr Osborne said there was a "real commitment" from the Government to help create more apprenticeships, with hundreds of millions of pounds being provided.

The Chancellor said he wanted to address regulatory "obstacles" preventing companies taking on apprentices, which he described as "totally self-defeating."

He admitted that some employers were reluctant to take part in apprenticeship schemes because of red tape, and announced that he was "actively looking" at the problem.

Mr Osborne said: "My commitment, and the money, comes with the condition that we sort out the regulatory problems and some of the burdens."


Actress sees off speculation about her appearance in an amazing way

Arts and Entertainment
Serge Pizzorno of Kasabian and Noel Fielding backstage at the Teenage Cancer Trust concerts
musicKasabian and Noel Fielding attack 'boring' musicians
peopleLynda Bellingham's tragic final Loose Women appearance moves audience to tears
Arts and Entertainment
'Right Here' singer Jess Glynne is nominated for Best Newcomer at the MOBO Awards 2014
musicExclusive: Jess Glynne hits out at 'ridiculous' criticism of white artists nominated for Mobo Awards
Have you tried new the Independent Digital Edition apps?
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Separated at birth? Frank Sivero (left) claims The Simpsons based Mafia character Louie on his Goodfellas character
arts + entsFrank Sivero sues Simpsons studio over allegedly basing mobster character on Frank Carbone
Carl Bernstein (left) and Bob Woodward (right) with former 'Washington Post' executive editor Ben Bradlee

The Washington Post editor helped Bob Woodward and Carl Bernstein bring down President Nixon


Stephanie first after her public appearance as a woman at Rad Fest 2014

Arts and Entertainment
Laura Wood, winner of the Montegrappa Scholastic Prize for New Children’s Writing

Children's bookseller wins The Independent's new author search

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Database Administrator

£300 - £350 Per Day: Clearwater People Solutions Ltd: The role could involve w...

Science Teacher

£21000 - £35000 per annum: Randstad Education Cambridge: Qualified secondary s...

Deputy Head of Science

£22000 - £36000 per annum + MPR / UPR: Randstad Education Southampton: Our cli...

Finance Manager - Recruitment Business (Media & Entertainment)

£28000 - £35000 per annum + negotiable: Sauce Recruitment: We have an exciting...

Day In a Page

Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
Ed Sheeran hits back after being labelled too boring to headline festivals

'You need me, I don’t need you'

Ed Sheeran hits back after being labelled too boring to headline festivals
How to Get Away with Murder: Shonda Rhimes reinvents the legal drama

How to Get Away with Murder

Shonda Rhimes reinvents the legal drama
A cup of tea is every worker's right

Hard to swallow

Three hospitals in Leicester have banned their staff from drinking tea and coffee in public areas. Christopher Hirst explains why he thinks that a cuppa is every worker's right
Which animals are nearly extinct?

Which animals are nearly extinct?

Conservationists in Kenya are in mourning after the death of a white northern rhino, which has left the species with a single male. These are the other species on the brink
12 best children's shoes

Perfect for leaf-kicking: 12 best children's shoes

Find footwear perfect to keep kids' feet protected this autumn
Anderlecht vs Arsenal: Gunners' ray of light Aaron Ramsey shines again

Arsenal’s ray of light ready to shine again

Aaron Ramsey’s injury record has prompted a club investigation. For now, the midfielder is just happy to be fit to face Anderlecht in the Champions League
Comment: David Moyes' show of sensitivity thrown back in his face by former Manchester United manager Sir Alex Ferguson

Moyes’ show of sensitivity thrown back in his face... by Ferguson

Manchester United legend tramples on successor who resisted criticising his inheritance
Two super-sized ships have cruised into British waters, but how big can these behemoths get?

Super-sized ships: How big can they get?

Two of the largest vessels in the world cruised into UK waters last week
British doctors on brink of 'cure' for paralysis with spinal cord treatment

British doctors on brink of cure for paralysis

Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
Ranked seventh in world’s best tourist cities - not London, or Edinburgh, but Salisbury

Lonely Planet’s Best in Travel 2015

UK city beats Vienna, Paris and New York to be ranked seventh in world’s best tourist destinations - but it's not London