The British economy is turning a corner but many risks remain Chancellor George Osborne has said in a keynote speech on the economy.
The Chancellor pointed to evidence showing that the government’s economic plan is working, but said that “these are still the early stages of recovery”.
“The last few months have decisively ended [the] controversy” about fiscal policy, he said.
He added that heeding calls to abandon the government’s economic plan in order to spend and borrow more would have undermined the recovery and “would be disastrous” now.
The Chancellor explained in the speech a detailed analysis of recent data to explain why, although many risks still remain, the emerging recovery is broad based and sustainable.
He add that many of the risks the UK faces are international, but that the UK must remain vigilant to any domestic risks that could emerge and avoid the mistakes of the past.
This includes using the government’s new regulatory system to spot imbalances as they emerge, staying the course with the deficit reduction plan and following through with far-reaching economic and structural reforms.
The Chancellor said:
Our economic plan is the only sustainable way to raise living standards.
Our record increases in the personal allowance have already saved a basic rate taxpayer £600 a year, rising to £700 a year by next year. We’ve used billions of pounds to help with fuel costs by freezing fuel duty for over two years.
Low mortgage rates. A £10,000 Personal Allowance. Fuel duty frozen. And soon tax free childcare. These make huge, positive impacts on the cost of living. And none of this would be possible if we had abandoned our tough spending plans.
There are many tough decisions still to be taken, the Chancellor concluded, adding that
the only sustainable path to prosperity is to reject the old quick fixes and stick to the course we have set.