The Diplomatic Dispatch

The British Ambassador to Sweden blogs on The Local

Posts Tagged ‘economy’

This week’s UK Budget

Thursday, March 20th, 2014

This week the Chancellor of the Exchequer, George Osborne, delivered his annual Budget Statement to the House of Commons in the UK Parliament.  This is the fifth time that Mr Osborne has done this.

The figures reveal that the British economy is now growing faster than previously predicted, and expectations for growth for both this year and the next have been revised upwards to 2.7% in 2014 and 2.3% in 2015. Building on a serious of radical reforms over recent years which have laid the foundations for the recovery, the Budget supports efforts to further reduce the national deficit, already reduced to 5.5% of GDP next year, so that it is completely eradicated by 2018-19.

Our efforts are helping develop a resilient environment in the UK where businesses are supported to invest, export, and create jobs. A record number of people are now in work, with the expectation that employment will reach 31.4 million by 2018. Over a million new jobs have been created in the last three years.

But the road ahead continues to remain challenging. And that’s why the Chancellor indicated that spending still needs to be carefully controlled – including on welfare, where the budget will be capped in future (to rise only in line with inflation).  The focus will remain on getting people from welfare into work.

The Budget was also aimed at supporting savers by fundamentally changing the way that people can access their pensions, and reorganising tax incentives around individual savings accounts (ISAs). Extra support has been given to childcare, as well as a package to help people wanting to buy a new home – targeted at those wanting to buy their own home for the first time.

British businesses will benefit from improvements to export finance, and efforts to reduce energy costs so the UK remains a competitive location for companies wishing to invest in manufacturing.

Finally, this Budget also saw the introduction of a new £1 coin. Claimed to be the “most secure coin in the world” the two-coloured piece will go into general circulation in the UK from 2017, and is intended to significantly reduce counterfeiting. With twelve sides it is seen as being of particular help to the visually impaired.

The full text of George Osborne’s speech

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Climate change: an economic opportunity

Tuesday, October 1st, 2013

Just over a year ago on a warm August afternoon, I paid a call on the Environment Minister, Lena Ek.  She had an idea she wanted to share with the UK about the campaign for action on climate change.

Twelve months on, that idea has been launched as a major international effort in New York, just as the UN’s Climate Change panel (IPCC) has underlined the scale of the challenge with its fifth assessment report, published last week in Stockholm.

Lena Ek’s idea was an new assessment of the economic costs and benefits of tackling climate change, not least to show how decarbonisation of our economies could bring opportunities for business as well as costs.

The UK was positive to the idea and Sweden and we have now teamed up with Colombia, Ethiopia, Indonesia, South Korea and Norway.

The New Climate Economy is the flagship project of the Global Commission on the Economy and Climate and will bring together a group of the world’s leading economists, policy and business experts to analyse and share the economic opportunities and risks that arise from climate change.

The project aims to give new, independent and expert insights on the debates around ‘green growth’.  Its starting point will not be climate change policy, but economic growth and development and the key economic priorities of governments, cities, businesses and investors.

We do not know what the final report will say.  And indeed that’s the point.  This will be an independent analysis of the evidence without pre-conceived views or conclusions.

The basis for its research programme will be the continuing need for growth and development in the world today.  It will focus on poverty reduction and job creation and the achievement of wider development priorities, including food security, energy access, urban planning, sustainable land use, natural resource efficiency, and cleaner air and water.

By consulting directly with, for example, finance ministries, business leaders, city mayors and major investors, the experts will analyse how the economic decisions affecting climate change are made.  The findings will be used to show how policy and investments can take climate risks and opportunities into account in a better way.

The report, to be published in September 2014, will make recommendations to governments and the private sector on how to achieve lower-carbon economic growth and development.

The New Climate Economy project aims to drive economic action and to inform global economic debate in the run-up to the UN Secretary General’s Leaders’ Summit on Climate Change in 2014, and the International Climate Change Conference in Paris in 2015.

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Facing up to the economic chill: Britain’s response

Thursday, December 6th, 2012

As winter sets in here, the Chancellor of the Exchequer delivered what’s called the Autumn Statement to Parliament in London on 5 December.

The Government’s economic strategy is focussed on reducing the deficit, restoring stability, rebalancing the economy and equipping the UK to compete in the global race.

The government’s new decisions relate to three key priorities:

Protecting the economy

Slow growth in the eurozone and other factors are leading to a more subdued and uneven recovery than expected with growth weaker and inflation higher than forecast. So the government plans::

•    funding £5.5 billion of additional infrastructure investment and support for businesses;
•    Tax measures that support growth, reward work, help with the cost of living and ensure that those with the most contribute the most.


To enable the UK to compete with emerging economies such as China, India and Brazil, the Government is taking action to rebalance and strengthen the economy while supporting those who want to work hard and get on, including:

•    A further one per cent cut in the main rate of corporation tax from April 2014, to 21 per cent;
•    Creation of a £1 billion Business Bank to help smaller businesses access finance and support;
•    Enabling UK Export Finance to provide up to £1.5 billion in loans to finance small firms’ exports;
•    Increased funding for UK Trade and Investments and extra support for the GREAT campaign to showcase Britain’s capabilities.


Fairness is a fundamental aspect of our plans to reduce the deficit and protect the economy.  The Government will help to ensure that it pays to work, supporting pensioners and those most in need, by:

•    Supporting those on low and middle incomes by increasing the personal allowance:
•    Increasing the basic State Pension by 2.5 per cent;
•    Targeting the promoters of aggressive tax avoidance schemes and the closure of loopholes;
•    Tackling offshore tax evasion by the creation of a dedicated HMRC unit, maintaining the momentum from the Government’s recent agreements with Switzerland and the US.

The government has also launched a major exercise to evaluate the impact of the EU on the UK. I’ll write about that in my next blog….

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