Osborne, it's time for Plan B

A strategy rethink is in order.

Although the reporting cycle is a little unusual – the chancellor George Osborne only made his interim report in December – the parallels with, and potential lessons from, his private sector peers are interesting. Since he took the job (and it was a pretty senior post for a first board position) this young CFO has been struggling to explain exactly how UK Plc would achieve the more difficult half of balancing the books, i.e. growing revenues.

Somewhat predictably, the focus has therefore been on the slightly easier side of the equation, i.e. cutting costs. Thus far this approach seems to have done enough to appease watching investors and analysts. Partly due to problems being experienced by most of its major competitors, and the resulting lack of alternatives, UK Plc has been able to hang on to its investment and top credit rating. But the tough market conditions don’t appear to be easing and the outlook remains bleak. Thus Osborne, like most CFOs, will have to work extra hard to convince those watching that he has a credible plan to get UK PLC’s finances back on track.

Having already had to admit he will miss several key targets he set himself for getting the financial house in order, Osborne now needs to rethink his strategy for achieving growth. As most experienced CFOs would confirm, it is not possible to cut your way out of a slump. A sudden bout of reckless spending would be equally disastrous. But when results keep going against you (and last week’s ONS figures, showing we’re heading for a likely triple dip recession were not what Osborne projected) then it’s time to acknowledge the current strategy needs a rethink.

The rest of this article can be read on economia

Photograph: Getty Images

Richard Cree is the Editor of Economia.

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PMQs review: Jeremy Corbyn turns "the nasty party" back on Theresa May

The Labour leader exploited Conservative splits over disability benefits.

It didn't take long for Theresa May to herald the Conservatives' Copeland by-election victory at PMQs (and one couldn't blame her). But Jeremy Corbyn swiftly brought her down to earth. The Labour leader denounced the government for "sneaking out" its decision to overrule a court judgement calling for Personal Independence Payments (PIPs) to be extended to those with severe mental health problems.

Rather than merely expressing his own outrage, Corbyn drew on that of others. He smartly quoted Tory backbencher Heidi Allen, one of the tax credit rebels, who has called on May to "think agan" and "honour" the court's rulings. The Prime Minister protested that the government was merely returning PIPs to their "original intention" and was already spending more than ever on those with mental health conditions. But Corbyn had more ammunition, denouncing Conservative policy chair George Freeman for his suggestion that those "taking pills" for anxiety aren't "really disabled". After May branded Labour "the nasty party" in her conference speech, Corbyn suggested that the Tories were once again worthy of her epithet.

May emphasised that Freeman had apologised and, as so often, warned that the "extra support" promised by Labour would be impossible without the "strong economy" guaranteed by the Conservatives. "The one thing we know about Labour is that they would bankrupt Britain," she declared. Unlike on previous occasions, Corbyn had a ready riposte, reminding the Tories that they had increased the national debt by more than every previous Labour government.

But May saved her jibe of choice for the end, recalling shadow cabinet minister Cat Smith's assertion that the Copeland result was an "incredible achivement" for her party. "I think that word actually sums up the Right Honourable Gentleman's leadership. In-cred-ible," May concluded, with a rather surreal Thatcher-esque flourish.

Yet many economists and EU experts say the same of her Brexit plan. Having repeatedly hailed the UK's "strong economy" (which has so far proved resilient), May had better hope that single market withdrawal does not wreck it. But on Brexit, as on disability benefits, it is Conservative rebels, not Corbyn, who will determine her fate.

George Eaton is political editor of the New Statesman.