GEORGE Osborne was attacked by a Conservative backbench MP yesterday for “wasting two years” pursuing an economic policy that is “not credible”.
The chancellor said Britain’s economic recovery “is being killed off” by the Eurozone crisis, calling for the currency area’s governments to pool more sovereignty and transfer more money from strong governments to weaker areas in an effort to end the crisis for good.
However, Conservative MP Douglas Carswell told City A.M. “this is clever politics, but not credible economics”.
“Other countries that do more trade with the Eurozone are enjoying much better growth figures than Britain is.”
Instead, Carswell argued, the government must address a long-running lack of competitiveness in the UK, which he believes was concealed by a lengthy credit boom.
“No amount of monetary stimulus can overcome this – we need competitiveness reform,” he said.
“The pity is we have wasted two years applying the policies of continuity Brown, trying the same failed remedies and allowing debt to keep on rising.”
Osborne also used his Sunday Telegraph article to argue he had successfully cut the deficit by a quarter, and that “our economy is benefiting from safe-haven status because of this government’s credible plan to deal with Britain’s debts.”
“Lower corporate tax rates and other reforms to make Britain open for business are also sharpening our competitive edge,” he added.
But Labour’s shadow chancellor Ed Balls also accused Osborne of passing the buck for the UK’s poor economic performance, calling the chancellor “deeply complacent and out of touch”.
“He will fool nobody with these increasingly desperate excuses,” said Balls.
“Despite the Eurozone crisis, Germany, France and the currency area as a whole have so far avoided recession while Britain’s recovery was choked off in the autumn of 2010.”
“George Osborne needs to finally realise his policies have failed. We urgently need a change of course and a plan for jobs and growth,” he concluded.