Building a sustainable recovery

While any recovery is good news, these very weak figures show that Gordon Brown's promise that Britain "would lead the world out of recession" turned out to be a cruel deceit - we were one of the first major economies to enter recession and the last in the G20 to leave it.

But more importantly, this fragile recovery does nothing to solve the government's debt crisis. We entered the recession with one of the largest deficits in the developed world and our budget deficit is now the largest of all the major economies, undermining international confidence in Britain.

We will only get the recovery right if we do as the OECD, the CBI and the governor of the Bank of England have said and start a proper debt reduction plan now. We urgently need a new model of economic growth that includes a credible deficit reduction plan that keeps borrowing rates low, creates jobs and doesn't choke off recovery.

That credible plan must eliminate a large part of the structural deficit over the next Parliament, starting in the coming financial year. The end of the recession removes the last excuse Gordon Brown has for sticking with next year's reckless spending plans. The only reason now why the difficult decisions are being delayed until 2011 is that there is a general election in 2010.

Britain's new economic model must be built on saving and private sector investment, not the unsustainable public spending and consumer debt of the past ten years. Exports and business investment provide the key to a sustainable recovery. Yet every tax decision and new piece of regulation from this Government sends the message that Britain is closed to business. We need to become competitive again. Simpler taxes with lower tax rates, removing employment taxes on new businesses employing new staff, stopping the remorseless rise of red tape on small businesses: all these can help.

The private sector must take the lead, but government must help with a modern planning system, encouraging green investment, and providing modern transport infrastructure. Above all, with a record one in five young people out of work, government must provide the education, training and welfare reform we need to get Britain working.

Britain was ill-prepared for the Great Recession and has suffered more than most. Now, as the last major economy to leave recession, we are equally ill-prepared for recovery. We need new, lasting sources of growth. That requires a new economic model and a new government that understands it.

George Osborne