Osborne: I will stick to Plan A

GEORGE Osborne, the chancellor, yesterday insisted he had an “utterly unwavering commitment” to cutting Britain’s gaping £130bn deficit and dismissed calls to adopt a Plan B in the face of global economic turmoil.

The chancellor contrasted Britain’s borrowing costs to those for countries such as Greece and Spain and argued that the yield on gilts, which has touched record lows in recent days, proved he was right to adopt his austerity measures.

“This is a huge vote of confidence... and a reminder of the reckless folly of those who said we were cutting too far and too fast,” Osborne said during a Commons debate.

He was speaking after cutting short his holiday at Disney World in Los Angeles to address Parliament, which was recalled yesterday to respond to the riots and turbulence in the financial markets.

During a barbed exchange, shadow chancellor Ed Balls urged Osborne to reconsider his position. He said: “He’s been to Hollywood – but he can’t just write a script that becomes reality. That is not the way the real world works.”

Osborne responded: “I did meet Mickey Mouse, and he seems to be writing Labour’s economic policies.”

The chancellor added the break-up of the euro would be “disastrous... for Britain” and that Bank of England governor Mervyn King had told him that UK banks would “weather the storm”.