Osborne says austerity is only option

GEORGE Osborne yesterday said he would not shy away from ambitious plans to slash public spending, insisting the economy would fall into a tailspin unless Britain’s yawning deficit is dealt with.

The chancellor was attempting to take on critics – both in the Labour party and in the coalition government – who say the austerity measures could weigh on the economy’s growth prospects.

He said: “To change course, put off dealing with our problems, be in denial about the scale of the deficit – is the surest way to disaster.”

And he called on those who oppose his plans for the biggest fiscal tightening in a generation to offer an alternative instead of sniping from the sidelines.

The Labour Party, which is in the process of electing a new leader, has failed to present its own plan for getting to grips with the deficit. Some leadership candidates back former chancellor Alistair Darling’s plan to halve the deficit in four years – a strategy that would have meant huge spending cuts – while others say the main focus should be on shoring up the anaemic economy.

Despite his insistence that sharp deficit reduction is the only credible course of action, Osborne warned that he agreed with Bank of England governor Mervyn King’s prediction the recovery would be “choppy”. He said it was unrealistic to expect a “smooth ride” considering the scale of the economic crisis.

The chancellor has staked his reputation on maintaining the country’s triple-A credit rating, but yesterday Moody’s warned Britain was still at risk of downgrade.

Osborne’s defence came as it emerged the qualifying age for winter fuel payments could be raised in a bid to cut the welfare bill. Rather than being eligible for the annual handout at 60, people could have to wait until they are at least 66.