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11 August 2011

Osborne’s statement on the economy – live blog

Minute-by-minute coverage of the Chancellor's statement to the Commons.

By George Eaton

Stay tuned for live coverage from 1pm. Press F5 or refresh to update the page.

13.07: Looks like the Q&A session following David Cameron’s statement on public disorder has run over, so George Osborne hasn’t started speaking yet.

14.19: Osborne is finally speaking now. In the last month, the FTSE 100 has fallen by 16 per cent, he says. But he boasts that the yields on UK gilts have fallen and claims it as a “huge vote of confidence” in Britain.

14:21: Osborne gets political, attacking “the folly” of those who said we were going “too far and too fast”. A slower pace of cuts would have been “too little, too late,” he argues.

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14.22: This is the most dangerous time for the global economy since 2008, says Osborne. The overhang of debt means the recovery will not be as fast as expected.

14.24: Events have vindicated the coalition’s decision to take “swift and decisive action” on the deficit, Osborne says. He repeats his new boast that Britain is a “safe haven” in the global storm.

14.26: Eurozone countries need to accept the “remorseless logic” of monetary union leading to greater fiscal union, argues Osborne. Many have long advanced this as a reason for Britain staying out of the euro and “thank God we did,” the Chancellor says. He adds that the break-up of the single currency would be “economically disastrous” for countries including Britain.

14.30: We need a “new model of growth,” says Osborne. Given that the economy has grown by just 0.2 per cent over the last nine months, who wouldn’t agree with him?

14:31: Ed Balls is speaking now. He begins by noting a rare point of agreement with Osborne. We were right not to join the euro.

14.32: Austerity is not working in Europe, says the shadow chancellor. Osborne should take the lead in developing a new plan for growth.

14.33: Noting that Osborne has many friends in the Tea Party movemen, Balls asks him if he is on the side of the US Federal Reserve or on the side of those VInce Cable attacked as “right-wing nutters”.

14.35: Osborne’s “reckless plans” have ripped out the foundations of the house and left Britain exposed, Balls says.

14.37: Falling bond yields are a sign of stagnation, not confidence, says Balls. He quotes Paul Krugman: “The wolf is at the door but Osborne thinks it is the confidence fairy”.

14:39: Balls ends by repeating his call for a temporary VAT cut and says Osborne cannot remain in denial.

14.40: Osborne’s reply begins with a joke: “I did go to California and meet Mickey Mouse and he seems to be writing Labour’s economic policy at the moment.”

14.41: The deficit reduction plan announced by Obama is as fast and as deep as the UK government’s, claims Osborne.

14.42: Where is Labour’s “tough deficit reduction” plan, asks Osborne. We have just heard Labour MP after Labour MP attack the cuts.

14.43: Osborne ends with a flourish. Balls is “almost alone in the world” in arguing for higher spending. He is “completely irrelevant” to where the international debate has gone, and is “living proof” of why the public will never again trust Labour with their money.

14.45: David Miliband asks Osborne if he has seen private sector forecasts suggesting that a 0.4 per cent reduction in growth will make it impossible for him to meet his target of eliminating the structural deficit by 2015.

14.46: Osborne replies by noting that the latest IMF report said he would meet his target even if growth was lower-than-expected. He cheekily adds that Labour would be in a “much more credible place” if David Miliband had delivered the leaders’ speech.

14.47: We’re going to end the live blog here. Thanks for reading.