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Deficit denial would wreck economy, says Osborne

Chancellor George Osborne has hit out at critics’ claims that the Government’s plans to reduce the deficit will risk Britain’s economic recovery.

In a speech delivered today in London, Osborne (pictured) said there is a credible plan in place to tackle the budget deficit, currently at 11 per cent of GDP.

The Chancellor said it was imperative to stick to this plan.

He said: “The alternative – to change course, put off dealing with our problems, be in denial about the scale of the deficit – is the surest way to disaster.

“It would wreck the British economy. And that is my central argument today as we start to approach the spending review this autumn.”

The Government has outlined plans to to tighten public finances by £113bn by 2014/2015, with £30bn coming from tax measures, £11bn from welfare reforms, and £10bn from lower debt-interest costs.

It is also looking to cut around £61bn from cuts to Government department spending.

Osborne also called for the need decentralise power, and said the Government is looking to ways of “removing uncertainty from the tax system, making business taxes more competitive, and ensuring the banking system works for the good of the whole economy.”

He added: “We will scrutinise every line of government spending to identify those that will do most to promote sustainable growth and future prosperity, and which should therefore be protected, and those other ares where spending is less productive, and where savings can safely be made.

“Only that way will the spending review promote a more balanced and sustainable model of growth.”

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