What George Osborne said – and what he really meant

"We are in debt crisis. You can't borrow your way out of debt"

What George Osborne did not mention in his speech is that Britain is in a growth crisis, too. Our gross domestic product grew by just 0.7 per cent in the first half of this year, well below expectations. A lack of demand is the central problem. No one is spending so the economy is not growing. The Chancellor has argued that cutting government debt will boost demand by encouraging businesses to invest. But it is not happening. The credit rating agency, Standard & Poor's, said yesterday that "the official assumption that the private sector will quickly step in to replace the withdrawal of public spending may prove optimistic". S&P projects growth next year of 1.8 per cent, well below the official forecast of 2.5 per cent. The alternative put forward by the Chancellor's critics is not for Britain to "borrow its way out of debt", but to ease up on the pace of cuts and tax rises in order to protect demand in the short term.

"For generations to come, people will say 'thank God we didn't join the euro' "

Mr Osborne showered William Hague with plaudits for his warnings in the late 1990s about the potential dangers of the single currency. But the British politician who played the key role in preventing Britain from joining the euro was Gordon Brown. As Chancellor, Mr Brown frustrated Tony Blair, who was keen on taking Britain into the single currency. And while euro membership would indeed have been economically disastrous for Britain, it will not be much better if the single currency unravels. Our three largest banks have extended some £180bn to companies and governments in the struggling eurozone periphery. If those nations crash out of the single currency our banks will go bust and they will have to be rescued again by British taxpayers.

"I have set the Treasury to work on ways to inject money directly into parts of the economy that need it such as small business... it is known as credit easing"

This amounts to an admission that Project Merlin, which was supposed to increase the flow of credit to small companies, has not worked. The reference to "credit easing" means the Chancellor wants to pull again on the monetary lever, by buying up government debt and the debt of companies. It could help. But the impact is uncertain. And it will take time to implement. Instead, the former Liberal Democrat Treasury spokesman, Lord Oakeshott, argues that it would be quicker and simpler to revisit Project Merlin and force the quasi-nationalised banks, Lloyds and the Royal Bank of Scotland, to lend to credit-starved small firms directly.

"I'll tell you what this Chancellor says to rich people who evade their taxes: we will find you. And we will find your money. The days of getting away with it are over"

Tough words. But Mr Osborne did a deal in August with the Swiss authorities that amounted to an amnesty for tax evaders. The bilateral deal also undermined efforts by the Organisation for Economic Co-operation and European Union to clamp down on evasion. Nor has Mr Osborne made any great efforts to force greater transparency in the tax havens in the Channel Islands. Meanwhile, he is cutting corporation tax to 23 per cent and has indicated that the top 50p rate of income tax for the wealthy is destined for the chop. This Chancellor still subscribes to the belief that the less tax paid by the rich, the healthier the economy.

"We are not going to save the planet by putting our country out of business. We're going to cut out carbon emissions no slower but also no faster than our fellow countries in Europe"

The Coalition promised to be the "greenest government ever", but the Chancellor appears to regard the decarbonisation of the British economy as an economic threat rather than an opportunity. If Britain was to move faster than our European neighbours in cutting C02 emissions, it could be a significant boost to Britain's renewable energy industry and our scientific research sector.