91Èȱ¬

Shadow chancellor George Osborne delivered what he called a "new economic model for Britain" at the annual Mais lecture on Wednesday. This included a commitment to make immediate spending cuts if the Tories were elected. Commentators consider the merits of his plans.

The Mr Osborne's proposals:

"A pledge of austerity is an unpromising theme for an election campaign. Yet in his Mais lecture yesterday, George Osborne, the Shadow Chancellor, made reducing the public debt the Conservative Party's defining economic message. It might be unusual politics but he was right to do so."

In contrast, that too many cuts could be fatal for the Tories:

"But the key criticism of Osborne's approach is that by clamping down hard on spending, the Tories risk driving the economy back into recession. Yet Osborne points out that despite Labour's promises not to take drastic action for fear [that] unsettling the economic recovery, it is already squeezing some budgets and has reversed the emergency reduction in VAT.
George Osborne may be showing more rigour in his approach to tackling the country's debt problems, but with their opinion poll lead constantly eroding, the Tories cannot risk being too brave."

The Mr Osborne was brave to stay away from the "scaremongering" immediate spending cuts would plunge us into a deeper recession:

"Mr Osborne is right to stick to his guns on the deficit. If only he could show similar boldness in making the moral case for lower taxes. The Tories have set out the right direction of travel on tax but need to display greater clarity of purpose. Their timidity could cost them dear."

what the significance of George Osborne speaking at the "pulpit-of-choice for British economic policy making" could be:

"Is this the birth of what we might call 'Osbornism'? Will future generations of economists trace back the renaissance of the UK economy from the fundamentals outlined in this lecture?
George Osborne won't want to be the only deliverer of a Mais lecture never to get to enact his economic philosophy."

that Osborne's policy could lead to class war:

"Osborne mentioned the Conservatives' plans to tackle inequality, but only as an afterthought. And that is precisely what the divide between rich and poor has been for decades: a worthy economic topic that is too big, nebulous and intractable to tackle. I suspect that this is about to change. We have known for some time that income disparities have climbed to the highest level since the Thirties. What is new, and worrying, is that whereas this gap narrowed as a consequence of the Great Depression - as the wealthiest lost money and the poorest benefited from the newly created social safety nets - this time the crisis has served to widen the chasm, not least because the plutocratic bankers were bailed out with taxpayers' cash."

The 91Èȱ¬'s economics editor Stephanie Flanders looks at how economists will take Mr Osborne's speech:

"You might still vigorously disagree with him - and many economists will. But you can't say he hasn't thought about it. Or considered the implications for growth."

Links in full

Stephanie Flanders | 91Èȱ¬ | Mr Osborne's prescription