Bloomberg News

Cameron Plans to Keep Osborne at Treasury, Official Says

February 01, 2013

U.K. Prime Minister David Cameron plans to retain George Osborne as his chancellor for his full term in office until 2015, a senior government official said, rebuffing reported calls from Tory lawmakers to oust the finance minister over a lack of economic growth.

Cameron is also still planning to introduce a tax break for married couples, though the measure won’t be in this year’s budget, the official, who asked not to be identified, told reporters yesterday in Monrovia, Liberia, where the premier was on the third leg of an African trip. Deputy Prime Minister Nick Clegg said this week his Liberal Democrat party doesn’t support the idea, setting up another policy clash within the coalition.

The prime minister’s spokeswoman said earlier yesterday that Cameron had “full confidence” in Osborne, after the Daily Mail newspaper reported that unidentified Conservative lawmakers are planning to write to Cameron after local elections in May demanding Osborne’s ouster if his budget in March fails to have an impact on the Tories’ results.

“We know that one of the biggest impacts on our economy is what’s happening in the euro zone, which is why we’re working hard to see a conclusion to the crisis in the euro zone,” the spokeswoman, Vickie Sheriff, told reporters in London. Official figures last week showed the economy shrank 0.3 percent in the final quarter of 2012, leaving it on the brink of an unprecedented triple-dip recession.

Tory Letter

The commitment to a tax break for married couples was part of the Conservative platform at the last election in 2010. This week, 15 Tory lawmakers wrote a letter to the Telegraph newspaper calling for it to be included in the budget measures that Osborne will announce in the House of Commons on March 20.

While the coalition agreement between Cameron’s Conservatives and Clegg’s Liberal Democrats includes a pledge to introduce the tax break, it also allows the Liberal Democrats to oppose it, something Clegg said this week they’ll do.

“It would be odd, wouldn’t it, to say people who chose not to get married have to pay higher tax,” Clegg said on his LBC phone-in radio show on Jan. 30. “That’s why my party doesn’t support the idea of a transferable tax allowance for married couples.”

Relations between the coalition partners soured further this week when the Liberal Democrats voted down Conservative plans to reduce the number of lawmakers in Parliament and redraw electoral boundaries, in a way that would have reduced an in- built disadvantage against the Tories. They were responding to a Conservative rebellion last year that killed off a plan to change the makeup of the unelected House of Lords.

Local elections are scheduled across England on May 2. Opinion polls show the Conservatives trailing about 10 percentage points behind the opposition Labour Party nationwide.

To contact the reporters on this story: Robert Hutton in Monro, Liberia at rhutton1@bloomberg.net; Thomas Penny in London at tpenny@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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