CHANCELLOR George Osborne will admit that it is taking longer than expected to turn around the economy but there are no plans to abandon his austerity measures when he unveils his Autumn Statement this week.
Osborne will announce plans aimed at supporting growth, including a £1 billion fund to help small businesses who want to export to growing economies elsewhere in the world.
But he will yet again defy calls to introduce an economic “plan B” even though his austerity measures are failing to make enough inroads into public debt.
The UK Chancellor will deliver the statement on Wednesday amid speculation that he will also have to admit that he will not meet one of his “golden rules” – that debt as a proportion of the total economy will be falling by 2015-16.
Last night, a Treasury source said: “While it was always going to be a hard road to recovery and it may be taking longer than we hoped to put things right, Britain is on the right track and turning back now would be a disaster.
“The credibility we have earned is still paying off: the deficit is down by a quarter, business has created a million jobs and the world has confidence that Britain can pay its way.
“We’ll be showing at the Autumn Statement that we are serious about being one of the winners in the global race.”
The statement is also expected to bring a new round of welfare cuts and £3 billion of savings from Private Finance Initiative deals used to fund public works such as schools and hospitals.
It emerged yesterday that Osborne and the Work and Pensions Secretary Iain Duncan Smith have agreed to freeze some out-of-work benefit payments next year, although the move will not affect pensioners.
The criteria for new benefit claimants are also expected to be tightened next year but the Lib Dem arm of the coalition has indicated it will only tolerate further cuts to benefits if the Chancellor increases taxes on the wealthy.
Yesterday, shadow Scottish Secretary Margaret Curran wrote to Scottish Secretary Michael Moore urging the UK Government to go for a “plan B” that would stimulate economic growth in Scotland.
Curran said: “Scots are trapped between two governments that have their priorities all wrong and the UK government still has no plans for growth in Scotland.
“You need to change course to ensure that the economy does not return to recession and that this squeeze on incomes and living standards does not continue.
“People across Scotland are suffering because of your Government’s policies, and in this week’s Autumn Statement you have the opportunity to change that.”
In her letter, she added: “The changes your government is making to welfare are having a damaging economic effect. The Fraser of Allander Institute have estimated that the welfare changes in Glasgow alone will result in close to 2,000 people across Scotland losing their jobs. With few jobs for people to go to, this will push more people on to benefits, and not into work.”