Charlie Rose Talks to U.K. Chancellor of the Exchequer George Osborne

Britain’s chancellor of the Exchequer defends austerity and discusses the Tories’ chances in the May 2015 general election
Photographer: Philip Toscano/PA Wire via AP Photo

You’ve been out defending Britain’s deficit-reduction plan.
I’m here saying to both the Americans and the Brits that we don’t have to accept, as countries, secular stagnation, long-term decline. Our best days can be ahead of us if we’ve got clear economic plans to get on top of our debts and back enterprise and back innovation. I’m really taking on the pessimists who say we had to spend our way out of crisis—and who now say we have to spend our way out of stagnation.

Britain is planning further budget cuts. How will you accomplish that?
Principally by reducing government spending, dealing with costly welfare entitlements. You’ve also got to make sure that wealthy people pay their taxes. So we are unapologetic in dealing with aggressive tax planning. What I don’t think you want to be doing is putting up taxes on businesses or people’s incomes that would hit people’s cost of living and also make our country uncompetitive. Britain thrives by being an open place that’s now attracting a huge amount of investment.

But your deficit is still the highest among G-7 nations, right?
Yes, it is. And it is, of course, half what it was. My message—and it’s going to be a message in these forthcoming elections—is you’ve got to stay the course. You’ve got to go on dealing with your deficit and bring your debt down as part of a program that says to the world, Britain has got its act together. This is a place to be. It’s a place to create your business. This is a place to invest. It’s a place to create jobs. And we, at the moment, are creating jobs at a faster rate than any other major economy in the world.

Britain is creating jobs faster than the U.S.?
Yes. Actually, unlike in the U.S., the participation rate in the U.K. is at an almost record high. So we’re not getting people dropping out of the labor force. The U.S. is a strong beacon in the world economy at the moment as well. I think what both of us have managed to achieve is this combination of activist central banks and fiscal consolidation—although in the U.S. this is more unintentional than intentional.

On Scottish independence, could the vote have gone the other way if you and David Cameron hadn’t fought for unity?
It was a great exercise in democracy. We had incredibly high turnout, close to 9 out of 10 voters. All my adult life, separatism in Scotland had been on the rise. In the end, David Cameron, ourselves, the Labour Party—it was a cross-party effort that said we’re going to confront this. I think we emerged stronger from it.

Polls currently show both Labour and the Conservatives unlikely to achieve a majority next May. What’s in store?
Actually, the Conservative Party is in reasonably good shape. We’re the incumbents, but people clearly see David Cameron as the best person to be prime minister. And when it comes to our economic competence, people see us as ahead of our opponents. Ultimately it’s going to be a hard-fought election, but I feel confident as we come into the Christmas period that we are well placed to earn the trust of the British public.

What about the debate that your budget cuts hurt the poor most?
Of course there’s a debate, but the debate is this: Who are the people who suffer most when your economy fails? Who suffers most when the deficit is out of control? It is the poorest in our society. And they are the least protected from turns in the cycle.

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