Chancellor: ‘Economy on up but cuts still needed’

EVIDENCE shows the Government’s austerity programme is working and the economy is “turning a corner”, Chancellor George Osborne said yesterday in his most upbeat assessment yet about the UK’s prospects.

Chancellor George Osborne. Picture: Getty

In a foretaste of the political argument Conservatives will use in the 2015 general election campaign, the Chancellor warned that holding to his course is the only way of delivering lasting improvement in living standards. Switching economic policies would be “disastrous”, putting at risk the advances achieved by the sacrifices of the past three years, he said.

In a speech at a building site in east London, Mr Osborne said that those – such as shadow chancellor Ed Balls – who argued for a Plan B involving more state borrowing and fewer cuts have “lost the argument” because they were unable to explain the recovery of the past few months.

He warned of a need to make “many billions” more in savings after the next election, telling Labour that “anyone who thinks those decisions can be ducked is not fit for Government”.

He added: “Just as our economy recovers and the British people’s efforts start to pay off – now is not the time to put all that at risk, and I will not do that to this country.

“We have laid the foundations. We have built on top of them. But we cannot stop now.”

Shadow Treasury minister Chris Leslie said: “Three wasted years of flatlining under George Osborne have left ordinary families worse off and caused long-term damage to our economy. This desperate attempt to rewrite history will not wash when on every test he set himself, this Chancellor’s Plan A has badly failed – on living standards, growth and the deficit.”