UK can’t rely on City of London for growth, says Osborne

Published on Thursday, 20 February 2014 10:41
Written by Daniel Mason

George Osborne has admitted that the UK economy is still unbalanced and warned against too great a reliance on the financial services sector to provide growth.

In a bid to fend of accusations of complacency, the chancellor said the recovery in the UK and globally was "not yet secure" and that the remaining risks could best be tackled by each country "putting our own houses in order".

But Labour claimed the government had still not recognised the seriousness of what it calls the "cost of living crisis".

In a speech in Hong Kong, Osborne said: "Our economy is still too unbalanced. We cannot rely on consumers alone for our economic growth, as we did in previous decades."

"And we cannot put all our chips on the success of the City of London. Britain is not investing enough. Britain is not exporting enough.

"Both business investment and exports are forecast to grow. But we can't be passive observers of the forecasts. We need to roll up our sleeves, get to work and make it happen."

The chancellor will attend a meeting of G20 finance ministers in Australia at the weekend.

And ahead of his budget next month, h added it would be a "huge mistake" to say "job done, let's avoid more hard decisions".

"This is not a budget where we can rest on our laurels and say 'job done'. It is a budget where we must confront our problems and deal with some hard truths."

Osborne's comments echoed those of the Bank of England governor, Mark Carney, who said last week that the recovery was "neither balanced nor sustainable".

Responding to the speech, Labour's shadow chief secretary to the Treasury, Chris Leslie, said: "George Osborne is finally recognising that the recovery, which he choked off in 2010, is still not secure or balanced.

"But he has not yet admitted that working people are facing a cost of living crisis and are £1,600 a year worse off since he became chancellor.

"We need action to secure a stronger recovery and earn our way to higher living standards."

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