Osborne To Use Extra Cash To Pay Off Debts

By Ed Conway, Economics Editor, Washington

George Osborne has signalled that he will use any extra money generated by the strengthening economy to help pay back the Government's debts.

Speaking on the fringes of the International Monetary Fund's annual meetings in Washington, the Chancellor announced that the Autumn Statement this year will be held on December 4.

A growing number of economists suspect that with the economy strengthening faster than many anticipated, the extra tax revenues generated will mean the Government will be able to reduce its borrowing projections.

However, the Chancellor indicated that he would not use any extra cash to fund giveaways.

He said: "I still sit down at the table at the G20 with one of the highest budget deficits. Britain still continues to have some very serious public finance challenges that need to be addressed.

"Although we've brought down the deficit by a third, it is still too high. And as we demonstrated with the proceeds of the recent disposal of the Lloyds shares, where we've got the resource available we've got to make sure that we are doing what we can to reduce our deficits and debts."

The Chancellor said he had been cheered at the change in tone from the IMF on the British economy, whose growth forecasts it upgraded by more than any other major economy this week.

"There's a recognition we've stuck to our plan," he said.

Osborne has warned of the 'gravity' of the US shutdown

Responding to widespread criticism of his Help To Buy policy, under which the Government will guarantee mortgages, Mr Osborne said: "We are addressing a very specific problem in the housing market - a lack of availability of high loan-to-value mortgages. We are fixing what has gone wrong in the financial system."

He added that he had given the Bank of England's Financial Policy Committee the powers to regulate the scheme: "I am the chancellor who gave the Bank of England the powers to deal with potential housing bubbles should they arise. Otherwise I wouldn't have involved the FPC."

He urged American politicians to resolve the debt ceiling crisis, saying he had met with US Treasury Secretary Jack Lew, as well as Republican Congressmen John Boehner and Paul Ryan.

"I told them of the gravity of the situation," said Mr Osborne. "They are well aware of that."

Commenting on the Royal Mail privatisation, Mr Osborne said he thought it "has been a huge success".

He added: "This is something Labour and Conservative governments have tried to do in the past and failed. It is an achievement for those who work in the Royal Mail, who will now get an investment in the business.

"With all these privatisations, they have been done at a discount. It is sensible, though, not to make a judgement on price the day after, but to wait until things settle down a bit in three or six months' time."

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