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Osborne insists Britain 'on the path to economic recovery'
Presenting his first Autumn Statement as Chancellor of the Exchequer, Chancellor George Osborne has asserted that Britain is 'on track' to recover from the deepest recession of post-war times.
The Statement was largely a response to the first Autumn forecast from the independent Office for Budget Responsibility (OBR), created by the Coalition Government earlier this year.
Despite issuing a cautionary note on the reliability of forecasts, Mr Osborne went on to argue that the OBR report vindicated the Government's 'decisive action' on the economy.
As widely predicted by economists, the economic growth forecast for 2010 was increased, from 1.2% to 1.8%.
However, the estimates for 2011 and 2012 were reduced from 2.3% to 2.1%, and from 2.8% to 2.6% respectively, with the forthcoming increase in VAT - coupled with over £80 billion of spending cuts - expected to slow the pace and result in a period of 'sluggish growth'. Meanwhile public borrowing forecasts for the current financial year have been revised downwards by £1 billion, and borrowing is expected to fall from £148.5 billion to £18 billion in 2015/16.
Mr Osborne was keen to emphasise the OBR's view that Britain will not experience a double-dip recession, and that there will instead be a 'gradual rebalancing' of the economy, with the Government set to reach its target of eliminating the current structural deficit a year early.
Turning to employment, the Chancellor highlighted the OBR's prediction that public sector job losses over the coming four years will be lower than previously expected, falling from 490,000 to 330,000. This was said to be a result of the Government's emphasis on making welfare cuts, rather than reductions in departmental spending.
The Chancellor also set out a number of measures intended to support UK economic growth, with the announcement of a programme of 'significant and far-reaching' reforms to corporation tax to improve competitiveness, including plans to introduce a lower 10% rate of corporation tax on profits from patents. A new Growth Review has also been launched, with priority being given to planning and employment law, support for exporters and inward investors, and reforms to the competition regime.