Learning from local government

Speaking to the Local Government Association today, Shadow Chancellor George Obsorne has spoken about how much Whitehall can learn from local government.

Osborne said that the Conservative Party was "100 per cent committed" to devolving power to local government and local towns and cities.

"Localism brings people closer to political power and gives them control over their own communities. By giving people more power and control over the services that are delivered in their areas, we can inspire a new spirit of civic pride in our communities".

He went on to say that local councils are often the best sources of new ideas and new policies, which is why he wanted to give them "more power and more responsibility to unleash their innovative potential".

"Most councils in England are controlled by Conservatives", he said. "So I want the Conservative Party to learn from what local Conservative councils are doing right now, as they are dealing with many of the constraints that we may face very soon".

Osborne added, however, that localism is about more than having the right policies, but that it's also about understanding that "not all good ideas are dreamt up in a policy unit in Whitehall".

Osborne accuses the FSA of "pulling its punches" on bank bonuses

George Osborne has attacked the Financial Services Authority’s new rules on how financial institutions should determine pay and bonuses.

The Shadow Chancellor said the FSA had “pulled its punches, leaving the promises of the Prime Minister and others to curb excessive bonuses absolutely worthless.”

He stressed, “Banks need to be told that the support provided by the tax payer is there to rebuild their balance sheets and resume normal lending; it is not there to help with mega payouts to bankers.”

“This failure to act is further evidence of the need to put an institution with the clout and authority of the Bank of England in charge, and that is what a Conservative Government will do.”

Osborne says only the Conservatives offer progressive reforms

Addressing the think-tank Demos, George Osborne argued that the Conservative Party is now the most powerful vehicle for change in this country - and the best hope for radicals and progressives.

The Shadow Chancellor said Labour has abandoned progressive politics by "Pursuing a course of illiberalism , centralisation, fiscal incontinence and opposition to meaningful public service reform."

He added: "There is nothing progressive about out-of-control spending that the poorest end up having to pay for, and nothing fair about huge national debts that future generations are left having to pay for."

And George stressed, "We face a choice between progressive reform with the Conservatives and front line cuts under Labour."

Where is the Government's strategy on the banks?

George Osborne stressed that taxpayers are “right to be angry” about Labour’s handling of the banking sector following the results announced this week by Barclays, HSBC, Northern Rock and Lloyds Banking Group.

The Shadow Chancellor said that “profits have been privatised and subprime losses have been nationalised” after Barclays and HSBC reported large profits, whereas the taxpayer-owned Northern Rock and Lloyds lost billions.

George attacked the Government for having “no strategy at all”, stressing:

"Time and again the Prime Minister and Chancellor said they'd stop big bonuses, now we see mega pay packages and massive bonuses off the back of taxpayers' money.”

“Time and again the Prime Minister and Chancellor assured us that they had binding agreements to secure more lending. Now we find lending is falling by unprecedented amounts.”

George also criticised the Government for failing to get the Asset Protection Scheme, which is vital to helping banks lend, up and running.

He stressed, “When it comes to banking this Government offers no leadership, no strategy, and no plan. We need a change of Government."

Osborne warns taxpayer support must not be used for mega pay deals

George Osborne warned that banks must not abuse taxpayer support following reports that UK banks will pay over £4bn in bonuses this year.

The Shadow Chancellor stressed, "Banks should watch out that they do not misuse taxpayer support – it’s designed to facilitate lending, not mega pay deals. Without taxpayer support, the whole system faced failure.”

In a speech at the ABI Conference last month, George warned that another round of unacceptable bonuses was on its way – but Labour have failed to take action to stop it.

George stressed, “The government - who own half the banking system - should realise that actions speak louder than words."

UK will have largest budget deficit of any G20 country

The International Monetary Fund (IMF) has predicted that the UK will have the largest budget deficit of all G20 countries in 2010.

After revising its estimates for the scale of government debt, the IMF now predicts that next year the UK will have a budget deficit of 13.3% of GDP, compared to 9.7% for the US.

George Osborne, the Shadow Chancellor, said, "It’s now official - the debt crisis is worse in Britain than any other major economy.”

And he warned, “We now face a 100 per cent national debt and the humiliation of the first ever downgrade in Britain's credit rating, with all the higher debt costs that entails. Gordon Brown's denial of the truth about the debt crisis and the need to cut spending whoever wins the election is doing serious economic damage to Britain's recovery.”

Osborne calls for realism as economy contracts further

George Osborne has stressed Gordon Brown must be more realistic about the state of the economy after the latest GDP figures revealed the economy is continuing to contract.

Data from the Office for National Statistics shows that the economy shrank by 0.8 per cent in the second quarter of 2009, meaning that the recession has now lasted for five successive quarters.

The annual decline is 5.6 per cent, the worst since records began.

George, the Shadow Chancellor, said, "These disappointing figures are much worse than expected and show that the recession is longer and deeper than the Government had lead us to believe.”

And he stressed, "It is time we had a bit more realism from our Prime Minister about the state he has lead the economy into and the debt crisis it now faces."

Osborne launches white paper on financial regulation

George Osborne has set out plans to abolish the failed tripartite system of regulation and give the Bank of England responsibility for maintaining financial stability.

At a speech in the Bloomberg offices, the Shadow Chancellor said the regulation system set up by Gordon Brown had failed.

And he launched a white paper on financial regulation, entitled ‘From crisis to confidence: Plan for sound banking’.

The document explains how a Conservative Government will create a strong regulatory framework, as an essential component of a sustained economic recovery. We will:

• Abolish the Financial Services Authority (FSA) and the Tripartite regime it operated with the Bank of England and the Treasury
• Create a strong and powerful Bank of England with the authority and powers necessary to ensure financial stability
• Create a powerful Consumer Protection Agency that will bring together in one place the consumer powers currently split between the old FSA and the Office of Fair Trading
• Demand that banks set aside much more of their own money for their risky lending as a form of insurance policy
• Appoint a Treasury Minister with special responsibility for fighting our corner in Brussels so that European regulations are right for the City of London
• Ask the Office of Fair Trading and the Competition Commission to conduct a focused examination of the effects of consolidation in the retail banking sector.

At the launch, David Cameron said, "The decisions that led to (the banking) crisis represent a policy failure of historic proportions. We now need deep, wide-ranging reform that matches both the magnitude of the crisis and the scale of the hardship inflicted on the British public."

George stressed, "If we can bring stability to our banking system, and reward long-term returns over short term bonus chasing, then we will have put in place a key foundation stone of an economic recovery."

Osborne announces fundamental reform of financial regulation

George Osborne has promised to overhaul the system of financial regulation and put the Bank of England in charge of regulating the banking system.

Following on from Sir James Sassoon’s review of financial regulation, George, the Shadow Chancellor, today set out plans to reform the way we regulate the banking system.

He announced that a Conservative Government would put the Bank of England in charge of the prudential supervision of our banks, building societies and other significant financial institutions.

George said, “We have learnt from this crisis the old truth: that you cannot separate central banking from the supervision of the financial system. And that sound regulation is not just about a check-list of rules; it’s about the authority to exercise judgement and to see the bigger picture.”

Sitting alongside this stronger Bank of England would be a powerful regulator to protect consumers.

Its role, George explained, would be “not just to add more health warnings alongside the acres of small print that already come with financial products, but to stamp out unfair practices like mis-sold Payment Protection Insurance and excessive bank charges.”

“The Labour Party wants to stick with the financial system which failed us and which they created," George stressed. "We propose to overhaul that system and put the Bank of England in charge."

"People will know at the next election that if they want to change the way the City is regulated and the way our banks are regulated, they need to change their Government.”

Osborne warns Government policies could damage recovery

George Osborne has attacked Labour’s economic approach after a new survey criticised the Government’s policies on taxation and red tape.

The British Chambers of Commerce Q2 Economic Survey warns that Labour's policies are threatening to stifle growth and employment.

George, the Shadow Chancellor, said, "Here is a clear warning from the Chambers of Commerce that Labour's tax and red-tape policies could do serious damage to any economic recovery and cost jobs.”

He stressed, "We need to send the message that Britain is open for business - but that is not what companies are hearing from the current Government."

"Demolition day" for Brown's tax and spend policies

The Governor of the Bank of England has called on Labour to set tougher goals to reduce the "extraordinary public debt".

This stark warning from the Governor, Mervyn King, comes on the same day as new figures show that Britain is facing the biggest deficit in the world.

George Osborne said, "This is the demolition day for Gordon Brown's tax and spending policies."

And the Shadow Chancellor added, "We urgently need an election to rescue this country from a government whose denial is a danger to the recovery."

Laying the path to a greener and more prosperous future

George Osborne has today launched the UK’s first trading markets for green companies.

Speaking at the London Stock Exchange, the Shadow Chancellor said this innovation would, in years to come, be seen as a “milestone” towards making the City of London the best place in the world for green investment.

George went on to say that ideas like this will “help to bring to an end the stale argument that we have to choose between economic growth and the environment”, which he said had always been a “false choice”.

He pointed to research by the Environment Agency, who have calculated that British manufacturing could increase its profits by up to £3 billion if environmental best practices become standard across the board, and the International Labour Organisation, who have said that 20 million new jobs could be created globally in the green technology sector in the years ahead.

George concluded by stating that this approach was part of the “new British economic model” proposed by the Conservatives, of a more stable and balanced low carbon economy.

Osborne stresses the need to talk honestly about cuts

George Osborne has accused Gordon Brown of “plain dishonesty” for trying to pretend that there won't be any spending cuts.

The Shadow Chancellor said it was "ridiculous" for Mr. Brown to claim that his plans to cut real spending on public services equate to ‘more Labour investment’ - and he told the Prime Minister to “tell the public the truth instead of treating them like fools”.

In an article in the Times, George stressed the “real dividing line” in British politics is “not ‘cut versus investment’, but honesty versus dishonesty”:

“Gordon Brown's claim that real spending will rise under Labour is akin to his claim that the 10p tax rise didn't hit the poor and that Alistair Darling is his first choice as Chancellor - it is just not true.”

George admitted that the Conservatives had initially “fought shy of using the ‘c’ word – cuts”, but stressed it was time to “talk honestly to the public about the spending decisions that need to be taken”:

“We should have the confidence to tell the public the truth that Britain faces a debt crisis; that existing plans show that real spending will have to be cut, whoever is elected; and that the bills of rising unemployment and the huge interest costs of a soaring national debt mean that many government departments will face budget cuts.”

Oakeshott: George Osborne dodged £55,000 tax bill by 'flipping'

George Osborne avoided £55,000 in capital gains tax by 'flipping' his second home allowance, figures calculated by the Liberal Democrat treasury team have revealed.

Mr Osborne claimed his second home allowance on a London property for two years which he later sold for £1.48m - a £748,000 profit. He did not pay capital gains on this because he had declared it as his main home since 1998, despite claiming mortgage interest payments on it from the House of Commons.

The capital gains liabilities for those two years would amount to £54,948.

Reacting Matthew Oakshott said; "This is a real test of David Cameron's leadership. He blackballed his country gentlemen with their moats and duck houses before their feet could touch the ground. But will he make his Shadow Chancellor pay back the tax he's dodged?"

George Osborne used his second homes allowance on a London property and then switched it to a large farmhouse in his Cheshire constituency of Tatton. He bought the Cheshire residence ten months before he won his Tatton seat in 2001. Instead of taking out a mortgage on the farmhouse he increased the mortgage on the London property which he bought for £700,000 in 1998.

George Osborne designated the London house his second home, even though it was his main residence, so he could claim mortgage interest payments. Two years later he took out a separate £450,000 mortgage on the farmhouse, made that formally his second home, and has since claimed £100,000 on it. It is claimed that Mr Osborne was able to reduce the mortgage on his London home to less than £200,000 before he sold it for £1.48million in 2006, making a £748,000 profit. He did not pay capital gains because he had declared it his main home since 1998 with the tax authorities - despite the two years it was formally designated as his second home with Commons officials.

Matthew Oakeshott concluded; "You can't tell the taxman one story and the fees office another. It looks like Cameron has either got one rule for the Notting Hill set and another for the knights of the shires, or that George Osborne is simply too close to chop."

"Unless Osborne pays the tax both he and Darling will be a pair of flippers."

Osborne outlines plans for "a new British economic model"

George Osborne has stressed the need to learn the lessons of the past decade and ensure our economy recovery – when it comes – is strong, sustainable and balanced.

In a speech to the Association of British Insurers, the Shadow Chancellor said that “the model of economic growth pursued over the last ten years is fundamentally broken” and outlined plans for a “new British economic model”.

He explained that the economic policy of a Conservative Government would be rooted in three priorities:

• The immediate need to restore Britain’s international credibility and preserve our credit rating by dealing with our huge budget defecit
• The transition from an economy built on excessive debt to one built on savings and investment
• Re-focussing our economy from the rush for short-term gains to the pursuit of long-term returns

George said, “If we follow these three priorities I believe we can do much more than simply survive this recession. We can emerge from it with a stronger, more geographically balanced, and more broadly based economy in which more of the British people feel they are sharing in its success.”

He warned that re-electing Labour will mean “more instability, higher taxes, higher debt and higher debt interest costs” – and stressed:

“Electing a new Conservative Government is the safer choice for a strong recovery.”

Osborne sets out plans for EU spending transparency

George Osborne has launched a new transparency drive ahead of the European elections taking place this Thursday.

The Shadow Chancellor promised to “shine a spotlight on where our money goes” in Europe.

And he outlined a series of measures which build on the transparency initiatives already announced by our MEP candidates:

• Transparency on the cost of Britain’s contributions to the EU, with the cost of transfers to the UK published at each Budget
• Transparency for EU spending administered by the UK government, and a push for more spending transparency across the EU as a whole
• Real accountability for EU budgets, with Conservative MEPs continuing to refuse to approve the EU accounts until they have been signed off by the auditors
• Transparency for MEPs’ and Commissioners’ expenses, including the British EU Commissioner, with all expense claims published online

George promised that no longer would "British taxpayer's money (disappear) into a Brussels black hole”:

“We will have a right to know: how much money we're giving to Europe; where it's being spent; and that the accounts show it's not being lost in fraud. And we're going to make sure that Britain's top Eurocrat and MEPs set an example to the rest of them by publishing their expenses."

We must be open about our banking problems

George Osborne has called for the EU to put transparency “at the heart” of its response to the banking crisis.

The Shadow Chancellor stressed Europe’s priority should be “a co-ordinated response to the danger poised by so-called ‘zombie’ banks”.

And he highlighted the success of the stress tests carried out on banks in America:

“By reducing uncertainty about the quality of banks’ balance sheets, the US stress tests have helped to bring some confidence back to the markets there, though risks remain. Crucially they have helped US banks to raise capital from private sources.”

Writing in the Financial Times, George said the EU-wide stress tests being conducted by the Committee of European Banking Supervisors should follow the US and make the relevant information public to rebuild confidence.

He criticised the decision to turn down a Freedom of Information request for the results of stress tests carried out on UK banks, arguing that publicising the information would reduce uncertainty in the financial markets.

And he stressed that transparency should also apply to taxpayer support for the banks, as the public “have a right to know what assets we are insuring”:

“This is the right European response to the financial crisis. The alternative is a European economy burdened with zombie banks and ill-considered regulation that could act as a drag on growth for years to come.”

Osborne warns Britain's economic reputation is on the line

George Osborne warned that Britain’s economic reputation is “on the line at the next General Election” after the UK’s outlook was downgraded by the credit ratings agency Standard & Poors.

It is the first time since the ratings began in 1978 that our outlook has fallen from stable to negative.

George, the Shadow Chancellor, said, “Standard & Poors have made it very clear that unless Britain has a Government with a credible plan to reduce debt then there will be a further downgrade, with all of the serious consequences for our prosperity that would entail.”

And he stressed, "Labour are putting our economic stability at risk by refusing to face up to the debt crisis they have created."

IMF report criticises Labour's economic record

George Osborne has highlighted a new report from the International Monetary Fund which criticises Labour’s economic record and calls on the Government “to put public debt on a firmly downward path”.

The IMF warns that Britain’s recovery will be “subdued and gradual” and attacks the “overheated property markets (and) high household indebtedness” that developed under Labour.

George, the Shadow Chancellor, said, “From a body like the IMF, that chooses its words carefully, this is strong stuff.”

He pointed out the IMF report backs up the Conservative view that Labour’s Budget did not set out a credible plan to deal with rising public debt.

And he warned, "The report confirms the independent view that the Government is ducking the hard decisions and leaving them to the next Government."

Bank of England report is "further blow" to Chancellor's credibility

George Osborne has described the Bank of England's latest quarterly inflation report as a "further blow to the credibility of the Chancellor and the honesty of the Budget."

The report predicts a "slow and protracted" economic recovery - and George stressed that this supports the Conservative position on Alistair Darling's Budget predictions.

"From the moment the Budget was announced, we Conservatives have questioned the Government's forecast that there will be a rapid return to boom time levels of growth."

George warned that the model of economic growth is "fundamentally broken" - and he stressed, "We cannot have a sustainable recovery until we have a Government that understands that."