What George Osborne said – and what he really meant


"We are in debt crisis. You can't borrow your way out of debt"

What George Osborne did not mention in his speech is that Britain is in a growth crisis, too. Our gross domestic product grew by just 0.7 per cent in the first half of this year, well below expectations. A lack of demand is the central problem. No one is spending so the economy is not growing. The Chancellor has argued that cutting government debt will boost demand by encouraging businesses to invest. But it is not happening. The credit rating agency, Standard & Poor's, said yesterday that "the official assumption that the private sector will quickly step in to replace the withdrawal of public spending may prove optimistic". S&P projects growth next year of 1.8 per cent, well below the official forecast of 2.5 per cent. The alternative put forward by the Chancellor's critics is not for Britain to "borrow its way out of debt", but to ease up on the pace of cuts and tax rises in order to protect demand in the short term.

"For generations to come, people will say 'thank God we didn't join the euro' "

Mr Osborne showered William Hague with plaudits for his warnings in the late 1990s about the potential dangers of the single currency. But the British politician who played the key role in preventing Britain from joining the euro was Gordon Brown. As Chancellor, Mr Brown frustrated Tony Blair, who was keen on taking Britain into the single currency. And while euro membership would indeed have been economically disastrous for Britain, it will not be much better if the single currency unravels. Our three largest banks have extended some £180bn to companies and governments in the struggling eurozone periphery. If those nations crash out of the single currency our banks will go bust and they will have to be rescued again by British taxpayers.

"I have set the Treasury to work on ways to inject money directly into parts of the economy that need it such as small business... it is known as credit easing"

This amounts to an admission that Project Merlin, which was supposed to increase the flow of credit to small companies, has not worked. The reference to "credit easing" means the Chancellor wants to pull again on the monetary lever, by buying up government debt and the debt of companies. It could help. But the impact is uncertain. And it will take time to implement. Instead, the former Liberal Democrat Treasury spokesman, Lord Oakeshott, argues that it would be quicker and simpler to revisit Project Merlin and force the quasi-nationalised banks, Lloyds and the Royal Bank of Scotland, to lend to credit-starved small firms directly.

"I'll tell you what this Chancellor says to rich people who evade their taxes: we will find you. And we will find your money. The days of getting away with it are over"

Tough words. But Mr Osborne did a deal in August with the Swiss authorities that amounted to an amnesty for tax evaders. The bilateral deal also undermined efforts by the Organisation for Economic Co-operation and European Union to clamp down on evasion. Nor has Mr Osborne made any great efforts to force greater transparency in the tax havens in the Channel Islands. Meanwhile, he is cutting corporation tax to 23 per cent and has indicated that the top 50p rate of income tax for the wealthy is destined for the chop. This Chancellor still subscribes to the belief that the less tax paid by the rich, the healthier the economy.

"We are not going to save the planet by putting our country out of business. We're going to cut out carbon emissions no slower but also no faster than our fellow countries in Europe"

The Coalition promised to be the "greenest government ever", but the Chancellor appears to regard the decarbonisation of the British economy as an economic threat rather than an opportunity. If Britain was to move faster than our European neighbours in cutting C02 emissions, it could be a significant boost to Britain's renewable energy industry and our scientific research sector.

Kenny Ireland, pictured in 2010.
peopleActor, from House of Cards and Benidorm, was 68
A scene from the video shows students mock rioting
newsSchool leaver's pic YouTube video features staging of a playground gun massacre
A family sit and enjoy a quiet train journey
voicesForcing us to overhear dull phone conversations is an offensive act, says Simon Kelner
Have you tried new the Independent Digital Edition apps?
ebookA unique anthology of reporting and analysis of a crucial period of history
Arts and Entertainment
The cast of The Big Bang Theory in a still from the show
tvBig Bang Theory filming delayed by contract dispute over actors' pay
England celebrate a wicket for Moeen Ali
sportMoeen Ali stars with five wickets as Cook's men level India series
Morrissey pictured in 2013
Life and Style
The director of Wall-E Andrew Stanton with Angus MacLane's Lego model
gadgetsDesign made in Pixar animator’s spare time could get retail release
peopleGuitarist, who played with Aerosmith, Lou Reed and Alice Cooper among others, was 71
Robyn Lawley
i100  ... he was into holy war way before it was on trend
Arts and Entertainment
High-flyer: Chris Pratt in 'Guardians of the Galaxy'
filmThe film is surprisingly witty, but could do with taking itself more seriously, says Geoffrey Macnab
Life and Style
food + drinkVegetarians enjoy food as much as anyone else, writes Susan Elkin
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
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

Digitakl Business Analyst, Slough

£40000 - £45000 per annum + Competitive Benefits: Progressive Recruitment: Dig...

Mechanical Estimator: Nuclear Energy - Sellafield

£40000 - £50000 per annum + Car, Medical, Fuel + More!: Progressive Recruitmen...

Dynamics NAV Techno-Functional Consultant

£50000 - £60000 per annum + benefits: Progressive Recruitment: An absolutely o...

PHP Developer

£45000 - £60000 per annum + competitive: Progressive Recruitment: PHP Develope...

Day In a Page

Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices
Could our smartphones soon be diagnosing diseases via Health Kit and Google Fit?

Could smartphones soon be diagnosing diseases?

Health Kit and Google Fit have been described as "the beginning of a health revolution"
Ryanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?

Can we learn to love Ryanair again?

Four recent travellers give their verdicts on the carrier's improved customer service
Billionaire founder of Spanx launches range of jeans that offers

Spanx launches range of jeans

The jeans come in two styles, multiple cuts and three washes and will go on sale in the UK in October
10 best over-ear headphones

Aural pleasure: 10 best over-ear headphones

Listen to your favourite tracks with this selection, offering everything from lambskin earmuffs to stainless steel
Commonwealth Games 2014: David Millar ready to serve up gold for his beloved Scotland in the end

Commonwealth Games

David Millar ready to serve up gold for his beloved Scotland in the end
UCI Mountain Bike World Cup 2014: Downhill all the way to the top for the Atherton siblings

UCI Mountain Bike World Cup

Downhill all the way to the top for the Atherton siblings
Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star