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

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

Graduate / Junior C# Developer

£18000 - £25000 Per Annum + bonus and benefits: Clearwater People Solutions Lt...

IT Project manager - Web E-commerce

£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...

Teaching Assistant - Shropshire

Negotiable: Randstad Education Chester: Teaching Assistants needed in Shropshi...

Junior/Trainee Buiness Intelligence (BI) Consultant

£30000 per annum + benefits: Ashdown Group: Junior/Trainee Business Intelligen...

Day In a Page

Read Next

i Editor's Letter: Take a moment to imagine you're Ed Miliband...

Oliver Duff Oliver Duff
The longer David Sedaris had his Fitbit, the further afield his walks took him through the West Sussex countryside  

Autumn’s subtle charm is greatly enhanced by this Indian summer

Michael McCarthy
Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits