Osborne to 'get Britain working' - except for ID contractors

George Osborne arrived at 11 Downing St today with little more than Vince Cable and stack of good wishes from business lobbyists to help him grapple with the UK’s enormous economic problems.

Osborne was quickly confirmed as Chancellor once David Cameron visited Buckingham Palace yesterday to kiss hands with the Queen in the wake of Gordon Brown’s surprise resignation. LibDem treasury spokesman Vince Cable is expected to take responsibility for the UK’s banking and finance sector. Any resemblance between Boy George and Vince and Obi Wan and Yoda is purely coincidental.

A message from David Cameron to Tory followers said the coalition had committed to “a significantly accelerated reduction in the budget deficit” including £6bn in cuts this year, and the effective repeal of Labour’s planned NI rise.

Osborne added, from the Treasury, “We are going to undertake long-term structural reforms of the banking system, on education and on welfare so that we have an economy that works for everyone. So now's the time to roll up the sleeves and get Britain working.”

Working that is except for anyone connected with the ID cards scheme, which categorically got the bullet in Cameron’s message.

According to reports a rise in capital gains tax on non-business assets is be on the cards, bringing it up from 18 per cent to nearer 40 per cent. The LibDems will get their £10,000 tax threshold, but the NI rise for employees will stay. Employers will escape the rise. The LibDems lose their £2m mansion tax, while the Tories lose their £1m inheritance tax threshold.

Bank of England Governor Mervyn King reportedly said he'd been briefed on the government's plans and was pleased by the focus.

The formation of the Tory-led coalition drew instant relief from the UK’s business lobby, with the British Chambers of Commerce saying “Fixing the public finances must be at the top of the agenda. The Conservative-led coalition must be absolutely clear about where spending cuts will fall, and about the need to curb relentless growth in the size and cost of the public sector...

“The next ninety days are crucial for recovery. We need concrete proposals to reduce red tape and tax burdens on business; action to move the economy away from consumption and the public sector and towards exports; and commitments to improve Britain’s key business infrastructure.”

The Federation of Small Business was equally chuffed, saying it "welcomes the certainty that the Coalition Government provides to businesses and the markets and looks forward to working with the new Government ministers. While compromises have been made, the policies laid out will help to safeguard business confidence allowing it to support further economic recovery."

However, the scale of the problem facing Boy George and his de facto number two was emphasized this morning by the release of figures which showed unemployment at its highest since 1994. Still, at least yesterday’s Gilt sale went through smoothly – under Brown it should be added. ®