Osborne refuses to change course




George Osborne has resisted pressure to change course over his austerity plans as he warned there were "no easy answers" to the UK's economic woes.

The Chancellor insisted that failing to tackle the country's debt and deficit problems could leave the UK on the brink of a crisis like that in Cyprus.%VIRTUAL-SkimlinksPromo%
He said Wednesday's Budget would contain measures to "help those who aspire to work hard and get on" but would also set out the scale of further curbs on public spending from 2015.

Mr Osborne indicated there would be help with the cost of childcare and also announced plans to accelerate the introduction of a cap on the amount people will have to pay for social care, bringing it in at £72,000 in 2016.

The £144-a-week single state pension will also be introduced a year ahead of schedule in 2016, Mr Osborne said.

The Chancellor has also backed plans put forward in Lord Heseltine's growth report to give local communities and businesses a greater say on how money is spent in their areas. But on his central aim of restoring the nation's finances, Mr Osborne said there was "no miracle cure" and "painstaking work" was required.

Mr Osborne told BBC1's Andrew Marr Show the crisis in the Cypriot banking system, which has left the country set to accept a European Union and International Monetary Fund bailout, illustrated the dangers for the UK.

"That is an example in Cyprus of what happens if you don't show the world that you can pay your way. I mean that is why in Britain we've got to retain the confidence of world markets," he said.

In a bleak assessment of the challenge facing the country, Mr Osborne said: "There is no easy answer to Britain's problems, there is no miracle cure because if there was a miracle cure it would have been deployed. It's just a lot of hard work of dealing with Britain's debts, helping businesses create jobs, helping families who want to work hard and get on."

He added: "The only way through for this country is to confront those problems head on and energise the people who are actually going to get this economy moving, the people with aspiration."

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Osborne refuses to change course

Most recently HM Revenue & Customs let Vodafone off the hook - for quite a sum. Vodafone paid out just £1.25 billion despite an original tax bill being closer to £8 billion (HMRC has always refused to reveal how much it thought the Vodafone final bill was). The episode was made even more shaming and painful because Vodafone was given several years to come good with the cash owed - even though it was sitting on a substantial cash pile at the time.

The Exchequer is estimated to have lost around £10 million to Goldman Sachs recently through an 'error' made by HMRC. The episode relates to an employee benefit trust run by Goldman allowing employees to take non-repayable loans that had no National Insurance contributions tied to them. HMRC did claw back the full amount from more than 20 businesses - but not Goldman. HMRC remains cagey about the details of the deal. Little HMRC accountability or transparency.

Huge problems with QinetiQ, the former Defence Evaluation and Research Agency, or DERA. A lack of clarity on contractual arrangements at the outset didn't help, allowing private equity company Carlyle to hammer the price down (why would you start negotiations when you didn't know the company's true value?). The Ministry of Defence behaved, it was said, like "an innocent at a table of card-sharps". Estimated cost to the taxpayer - £90 million. Huge sums were later made by QinetiQ management when the company listed.

The TaxPayers' Alliances estimates £2.7bn worth of taxpayer cash was wasted with a super-expensive 'National Programme for IT in the NHS'. The Department of Health, in the end, had very little to show for it as a consequence. Another example of poor management and a seemingly ingrained inability to provide taxpayers' with value for money.


"BT is paid £9 million to implement systems at each NHS site, even though the same systems have been purchased for under £2 million by NHS organisations outside the Programme", the Commons Public Accounts Committee noted.

Contentious. The Office for National Statistics estimated this has declined 3.4% since 1997, "with inputs increasing by 38%." The Centre for Economics and Business Research estimate that this inefficiency costs the taxpayer £58.4 billion a year.

Given the above record, are there any deals that the taxpayer has actually won out on? Not many, but the one successful project was the roll out of new Jobcentre Plus offices. It came in £314 million under budget, claims the Taxpayers' Alliance. A small cheer.

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