George Osborne on Conservative economics after the crunch

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George Osborne on Conservative economics after the crunch

08 Apr 2009

Speakers: George Osborne MP

Shadow Chancellor George Osborne explains modern Conservative economic policy in the wake of the financial crisis, with a primary focus on rationality and irrationality. As we move from a period of prosperity to a period of austerity, Osborne explains that financial policy-making can no longer be based on the idea that all people behave rationally. He gives the current tax credits sytem as an example - this policy, which relied on people informing the authorities of changes in income, lost the government billions of pounds in overpayments and is now resulting in hundreds of thousands of people being plunged into debt as the money is reclaimed.

He explains how the Conservative party has been working on formulating policy that takes account of behavioural economics, and discusses some of the measures they want to introduce, such as introducing a 7-day 'cooling off period' on store credit cards, and the introduction of comparative data on utilities bills. The latter measure, when used in California, led to a reduction in the bills of its residents. He also outlines how the Conservatives plan to make economic policy robust to irrational behaviour by market participants, taking measures such as the creation of an independent office for budget responsibility.

Finally, he outlines how the Conservatives plan to introduce more efficient regulation of banks and other financial institutions, in order to avoid a repetition of the recent financial crisis.

This video was kindly provided by The RSA