George Osborne: Britain must start to save and learn to live within its means

Share
Related Topics

The great question that Britain faces is: how can the whole country live within its means and pay its way in the world? Our current debt crisis is a reflection of the fact that we have not paid it. Our trade balance went from a $7bn surplus in 1997 to a $95bn deficit ten years later. Last year, three quarters of our government debt was bought overseas. Of course righting the global imbalances must be tackled internationally. While the imbalance might be global, that does not mean we should not act at home and ensure we can pay our way in the world. And to do that we need to become more productive. We need nothing short of a second supply-side revolution. We need a stronger and broader economy.

That means a dramatically simpler tax system, and we now have detailed proposals about how to deliver that. Education reform will be vital. That's why we are devoting huge time and effort to ensuring we can deliver changes to the structure and standards of our school and further education system. And we are deadly serious about creating a low-carbon economy, with all the manufacturing jobs that will bring. The low-carbon policy paper we published, which includes plans for a new smart electricity grid and high-speed rail network, is the most coherent and visionary plan produced by any major political party in the world. All these measures will allow Britain to find the economic strength that we need to give confidence in our recovery, to grow our exports once again, and to pay our way in the world.

Expanding our export base is one side of rebalancing our economy. The other is rebalancing how we pay for growth. We need a long-term structural change in the amount we save. When overseas capital dries up, it is only by restoring domestic saving that we can maintain domestic investment. Yet our national savings rate is one of the lowest in the developed world. So, in the long term, we must save more as a nation. And government needs to support savers. That's why we have asked the Government to abolish tax on savings income at the basic rate in the Spring Budget. In the short term, it helps the innocent victims of the recession. In the long term, it encourages saving and eliminates the double taxation of those savings.



Shadow chancellor George Osborne spoke at a Reform conference yesterday

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

SQL Implementation Consultant (VB,C#, SQL, Java, Eclipse, integ

£40000 - £50000 per annum + benefits+bonus+package: Harrington Starr: SQL Impl...

SQL Technical Implementation Consultant (Java, BA, Oracle, VBA)

£45000 - £55000 per annum + Benefits + Bonus: Harrington Starr: SQL Technical ...

Head of IT (Windows, Server, VMware, SAN, Fidessa, Equities)

£85000 per annum: Harrington Starr: Head of IT (Windows, Server, VMware, SAN, ...

Lead C# Developer (.Net, nHibernate, MVC, SQL) Surrey

£55000 - £60000 per annum + Benefits + Bonus: Harrington Starr: Lead C# Develo...

Day In a Page

 

i Editor's Letter: Still all to play for at our live iDebate

Oliver Duff Oliver Duff
'I’ll tell you what I would not serve - lamb and potatoes': US ambassador hits out at stodgy British food served at diplomatic dinners

'I’ll tell you what I would not serve - lamb and potatoes'

US ambassador hits out at stodgy British food
Radio Times female powerlist: A 'revolution' in TV gender roles

A 'revolution' in TV gender roles

Inside the Radio Times female powerlist
Endgame: James Frey's literary treasure hunt

James Frey's literary treasure hunt

Riddling trilogy could net you $3m
Fitbit: Because the tingle feels so good

Fitbit: Because the tingle feels so good

What David Sedaris learnt about the world from his fitness tracker
Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Second-holiest site in Islam attracts millions of pilgrims each year
Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering