George Osborne ‘not for turning’ on deficit reduction

The latest gross domestic product figures for the second quarter of 2011 reveal that the economy grew by just 0.2 per cent following an increase of 0.5 per cent in the first quarter of 2011.

Chancellor George Osborne told Channel 4 News it was “positive” that the economy continued to grow.

He admitted there were big economic challenges but said Britain was “navigating its way through these challenges as a stable place to do business”.

Labour has been calling for an economic plan B, insisting that the Government’s policy of using tax rises and spending cuts to eliminate the national deficit by the end of the Parliament risks choking off growth by cutting “too far and too fast”.

Faisal Islam blogs: My interview with Osborne

But the Chancellor told Channel 4 News’ Economics Editor Faisal Islam he was “absolutely not for turning”.

“If we were to abandon our deficit reduction plan, if we were to borrow more, increase our deficit, I think most people in the rest of the world would think we had gone completely mad.

“That’s why if you look around the world at all the big economic organisations that comment on world economies none of them are suggesting Britain changes its deficit reduction plan.”

He added: “What I do think we need to do as a country is do more to promote growth to build on what we’ve already done – changes to the planning system, reforms to education and welfare, cuts in business taxes – to see what more we can do to give ourselves a more productive and balanced economy where we’re not addicted to debt.”