Osborne Economy Plan Draws Fire, Critics Question Competence

Chancellor of the Exchequer George Osborne came under renewed criticism after Britain’s recession deepened in the second quarter, prompting questions about his economic plans and whether he should remain at the Treasury.

The opposition Labour Party and economists including Stewart Robertson at Aviva Investors said Osborne should reconsider his fiscal squeeze after the economy shrank 0.7 percent, the most in more than three years. One coalition lawmaker questioned whether the chancellor should keep his job.

“There is enough to be seriously worried about and it casts doubt on the idea of an expansionary fiscal contraction,” said Robertson, chief European economist at Aviva in London. “It would be absolutely irresponsible for the government not to take note and say we have to take our foot off the brake.”

Osborne’s 2010 austerity program — which was extended for two years in November — envisaged that the economy would be growing by 2.8 percent this year. Instead, it is 0.9 percent smaller than in the third quarter of 2010, just after Prime Minister David Cameron’s coalition came to power, and struggling to overcome aftershocks of the 2008 banking crisis and the euro- area debt turmoil.

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