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News story

Osborne: Together we will ride out the storm

Monday, October 3 2011

Osborne

Today George Osborne set out the Government's activist economic strategy to deal with the country's debts, promote growth and spread prosperity.

In a speech demonstrating the Government's determination and resolve, he explained why more debt cannot be the solution for the debt crisis this country faces.

In a striking coincidence of timing, as the Chancellor was speaking, S&P, the rating agency that just downgraded the US, reaffirmed the UK's AAA rating. S&P said that 'The ratings could come under downward pressure if, against our expectations... the coalition government's commitment to fiscal consolidation falters.'

Today's speech also set out how the Government would deal with the deficit to keep interest rates low, get credit flowing, support business to rebalance the economy and also offer help for families with the cost of living.

Dealing with the deficit to keep interest rates low

George Osborne reaffirmed the Government's commitment to its deficit reduction plan, and explained why it is a crucial part of any plan for growth.

He stressed the importance of the low interest rates that the Government's deficit plan has achieved and took on those who would gamble the priceless fiscal credibility that this Government has earned with the international markets on the bet that borrowing a few billion pounds more would make all the difference.

Getting credit flowing

To help get the economy moving the Chancellor announced that he will look at the options to get credit flowing to small firms through 'credit easing'. This would inject money directly into parts of the economy most in need, for example small businesses, without adding to the deficit.

Support for business and rebalancing the economy

There were a number of new measures to support business and help rebalance the economy.

Introduction of fees for employment tribunals

From April 2013 the Government will introduce fees for employment tribunals. There is currently no charge for an applicant who wants to make an employment tribunal claim - unlike in the civil and family courts, where fees are routine. Fears of vexatious claims often act as a disincentive for businesses to employ new people. Introducing fees will help give businesses the confidence they need to create new jobs. We will consult on the level and structure for fees, and on ensuring remissions are available for the lowest paid.

Doubling the qualification period for unfair dismissal tribunals

We will double the qualification period for unfair dismissal tribunals. Currently an employee can claim for unfair dismissal after being employed for only a year. We will double that, so from April 2012 employees will only be able to make a claim after two years. "Day one" rights - such as the right not to be discriminated against - will not be affected. This reform is a priority for business groups, including the CBI, who have long been calling for reform of the employment tribunal system in order to help businesses create jobs.

£150 million investment in mobile coverage

We will invest £150 million in improving mobile coverage across the country. Working with Ofcom we will aim to extend mobile phone coverage to 99 per cent of the country. Currently in Wales, Scotland and Northern Ireland only 90 per cent of the population has good mobile coverage. Across the UK as whole there is only 95 per cent coverage. In consultation with local communities we will install new mobile phone masts, which will improve coverage for 6 million people. This will improve connectivity and productivity across the country.

Get Britain Building: releasing public sector land and increasing Right to Buy discounts

We will release enough public sector land to build as many as 100,000 new homes. There will also be an option to build now and pay later in order to help finance development. We will also increase the Right to Buy discounts, and use the receipts to build a further 100,000 homes. These measures will help support up to 400,000 jobs, will provide a boost to homebuilding, and will make it easier for people to find affordable homes.

Graphene

We will invest £50 million in a Graphene Global Research and Technology Hub to commercialise graphene. This will capitalise on the UK's international leadership in the field. It will act as a catalyst to spawn new businesses, attract global companies and translate the value of scientific discovery into wealth and job creation for the UK.

E-infrastructure and High Performance Computing

We will invest £145 million in High Performance Computing (HPC) and the associated e-infrastructure. This will make the UK a world leader in supercomputing. Improving computing infrastructure is vital to driving growth and giving businesses confidence to invest in the UK.

Enterprise Zones

We will invite the Lancashire and the Hull and Humber Local Enterprise Partnerships to develop proposals for two new Enterprise Zones in response to the recent announcement by BAE Systems of plans for potential job losses at their sites in Brough, Warton and Samlesbury. This is swift action to ensure the skilled manufacturing base in these areas is maintained.

Help for families and pensioners on the cost of living

The speech also confirmed that £805 million will go towards freezing council tax for a second year. Under Labour council tax doubled. This year the Government introduced the first ever council tax freeze, and today George Osborne set out plans to ensure local authorities can freeze council tax next year too. This will save the average family up to £72, on top of the savings from last year.

Read the speech in full here.

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