Chancellor Osborne: I am not for turning

 
Julian Harris
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CHANCELLOR George Osborne came out fighting during questioning in parliament yesterday, insisting that he will continue with plans to cut the UK government’s annual deficit.

Osborne also rejected calls from Labour’s Ed Balls for another tax on financial sector bonuses -- and was quick to make fun of the back-stabbing suffered by Balls at the hands of former Labour chancellor Alistair Darling this week. Darling has admitted that the previous tax on bonuses “had to be a one-off”, Osborne said.

Osborne also received a boost from Lloyd’s of London chair Lord Levene, who backed the chancellor’s growth strategy.

Levene said the financial industry should end its “self-imposed flagellation” in order to help foster economic growth fuelled by the private sector.

Osborne defended his austerity programme yesterday, ahead of a crunch meeting with finance ministers from other G7 countries.

“The way this country and other countries are going to get growth is not by taking yet another fix of the debt-fuelled spending bubble that got us into the mess we are in at the moment,” he said, during a separate question and answer session. “I will further discuss fiscal consolidation plans in the G7, G20 and IMF meetings later this month,” Osborne added.

IMF chief Christine Lagarde will visit London this Friday to meet with Osborne prior to the G7 meeting in Marseilles later that evening.

Lagarde appeared to contradict Osborne at the end of last week, by calling for yet another period of fiscal stimulus.

“Looking at Europe, we recommend countries adjust their austerity programmes to a changed situation and consider measures to drive growth,” she told German magazine Der Spiegel on Sunday.

Also appearing in Westminster yesterday, Prime Minister David Cameron signalled that Britain will demand the return of some powers from Brussels to London in return for agreeing to any new European Union treaty.

German finance minister Wolfgang Schaeuble said that changes to treaties may be required to bring the Eurozone closer together as a guard against future debt crises. A German court is expected to rule today that its parliament should have more powers to determine whether or not to support bailouts to ailing Eurozone member states.