Treasury questions Osborne on Ireland loan
Chancellor of the Exchequer George Osborne has given details on the government's loan to Ireland, said he believes in UK recovery prospects and dismissed criticism of Mervyn King.
Speaking at the Treasury Committee today, he said of the loan, which the government is due to present tomorrow: “It's emergency legislation, we have spoken to the opposition about this. What I'm planning to do is publish tomorrow the legislation, and ask the House to vote it through next week.”
The UK government has offered a £3.25bn loan to neighbouring Ireland, as part of a European move to bail out the country from its overwhelming economic situation.
The chancellor confirmed that the legislation “is absolutely exclusive to Ireland, and not to other countries.
“It will have a cap on the loan that is provided,” George Osborne explained. “There is an ability in the legislation to increase the cap, but that would have to be done with the affirmative vote of the House of Commons, and I'm certainly not expecting to exercise that. It has also got a sunset clause in it which cannot be renewed, which means the bill will fall after five years.”
The chancellor confirmed that the trade flow with Ireland, which is one of Britain's main commercial partners, has decreased, as have UK's exports to the island.
Talking about the current situation in the UK, he added: “It's the [Office of Budget Responsibility's] view that the recovery is sustainable. They are forecasting growth of over 2% each year, with employment growth each year. My interpretation is that the recovery is on track.”
The Treasury Committee also questioned the chancellor about the recent allegations of an active role played by Mervyn King, chairman of the Bank of England, in convincing the coalition government to design much tougher cuts than it had originally planned.
George Osborne replied to the committee: “[King] was appointed by Gordon Brown, reappointed by [Alistair] Darling. It's not as if he's a Conservative or Liberal Democrat appointment to the Bank, so the idea that he is somehow partisan is wrong.”
The issue over Mervyn King's conduct was first ignited by a WikiLeaks diplomatic cable, released at the end of November, which reported a private conversation between Mervyn King and the US ambassador to London, Louis Susman.
According to the cable, Mervyn King told the ambassador before the election that he was sceptical about David Cameron and George Osborne, for their “lack of experience”. He told Mr Susman that he had held private meetings with them, to urge them to strengthen their policy on the necessity of tougher cuts in their plan to reduce the deficit.
In the conversation, which took place on February 16 2010, Mr King thought that “David Cameron and shadow chancellor George Osborne have not fully grasped the pressures they will face from different groups when attempting to cut spending.
“Both Cameron and Osborne have a tendency to think about issues only in terms of politics, and how they might affect Tory electability,” wrote the US ambassador. “King also expressed concern about the Tory party's lack of depth. Cameron and Osborne have only a few advisers and seemed resistant to reaching out beyond their small inner circle.”
The leak drew criticism on Mervyn King from members of the Bank's monetary policy committee. They claim, as head of the Bank, he is supposed to be impartial and does not include “straying into politics”. This document has given more grounds to previous accusations claiming that Mr King pressured the Tories to draw a much higher deficit-reduction program than they had initially planned – giving him a primary role in what is happening at the moment around the country.
(Read the full article on The Fresh Outlook)
02.11.2010
Speaking at the Treasury Committee today, he said of the loan, which the government is due to present tomorrow: “It's emergency legislation, we have spoken to the opposition about this. What I'm planning to do is publish tomorrow the legislation, and ask the House to vote it through next week.”
The UK government has offered a £3.25bn loan to neighbouring Ireland, as part of a European move to bail out the country from its overwhelming economic situation.
The chancellor confirmed that the legislation “is absolutely exclusive to Ireland, and not to other countries.
“It will have a cap on the loan that is provided,” George Osborne explained. “There is an ability in the legislation to increase the cap, but that would have to be done with the affirmative vote of the House of Commons, and I'm certainly not expecting to exercise that. It has also got a sunset clause in it which cannot be renewed, which means the bill will fall after five years.”
The chancellor confirmed that the trade flow with Ireland, which is one of Britain's main commercial partners, has decreased, as have UK's exports to the island.
Talking about the current situation in the UK, he added: “It's the [Office of Budget Responsibility's] view that the recovery is sustainable. They are forecasting growth of over 2% each year, with employment growth each year. My interpretation is that the recovery is on track.”
The Treasury Committee also questioned the chancellor about the recent allegations of an active role played by Mervyn King, chairman of the Bank of England, in convincing the coalition government to design much tougher cuts than it had originally planned.
George Osborne replied to the committee: “[King] was appointed by Gordon Brown, reappointed by [Alistair] Darling. It's not as if he's a Conservative or Liberal Democrat appointment to the Bank, so the idea that he is somehow partisan is wrong.”
The issue over Mervyn King's conduct was first ignited by a WikiLeaks diplomatic cable, released at the end of November, which reported a private conversation between Mervyn King and the US ambassador to London, Louis Susman.
According to the cable, Mervyn King told the ambassador before the election that he was sceptical about David Cameron and George Osborne, for their “lack of experience”. He told Mr Susman that he had held private meetings with them, to urge them to strengthen their policy on the necessity of tougher cuts in their plan to reduce the deficit.
In the conversation, which took place on February 16 2010, Mr King thought that “David Cameron and shadow chancellor George Osborne have not fully grasped the pressures they will face from different groups when attempting to cut spending.
“Both Cameron and Osborne have a tendency to think about issues only in terms of politics, and how they might affect Tory electability,” wrote the US ambassador. “King also expressed concern about the Tory party's lack of depth. Cameron and Osborne have only a few advisers and seemed resistant to reaching out beyond their small inner circle.”
The leak drew criticism on Mervyn King from members of the Bank's monetary policy committee. They claim, as head of the Bank, he is supposed to be impartial and does not include “straying into politics”. This document has given more grounds to previous accusations claiming that Mr King pressured the Tories to draw a much higher deficit-reduction program than they had initially planned – giving him a primary role in what is happening at the moment around the country.
(Read the full article on The Fresh Outlook)
02.11.2010