Davos 2011: Osborne seeks move from stability to growth

George Osborne says the UK must move from "securing financial stability" to "securing consistent growth".

The chancellor's plan to achieve this will include debt reduction, cutting corporate tax rates, and reforms to the health and education sectors.

And he called on firms to spend their cash reserves to revive the economy.

Mr Osborne also told Davos delegates he was unhappy with UK GDP figures this week which showed a 0.5% contraction in the last quarter of 2010.

"We did have disappointing GDP figures this week, which no-one was forecasting," he said.

He said that despite the adverse weather effects of the UK's coldest December for 100 years, the figures were still disappointing.

"So the challenge for the government in the next year or so is to remove the supply side obstacles to growth," he said.

"The [other] challenge to me is that UK corporates are sitting on cash on their balance sheets equivalent to about 5% of GDP. What I've got to do in the next few months is to persuade them to start spending that money."

Mr Osborne also pointed out that his government was rebalancing the UK economy, by encouraging manufacturers and exports.

Among the Davos movers and shakers, Britain's rapid approach to cutting its borrowing stands out as a bold experiment”

He told the World Economic Forum delegates in Davos that the UK was putting its "house in order" and addressing its problems, and praised the eurozone for also seeking a greater economic stability with its bloc.

But, echoing David Cameron's comments, he also called for greater US-style competitiveness with the European Union.

On banks, Mr Osborne said he wanted to see them lend more into the UK economy, and to pay themselves smaller bonuses than last year.

The chancellor's vision for the economy was supported by Barclays chief executive Bob Diamond, who said: "What the Chancellor said resonates very much.

"Jobs is the biggest key, after a period of financial and monetary stimulus the developed countries will be reducing public spending.

"There are not going to be jobs produced from the public sector. It is time to shift the mantle of growth from the public sector to private sector."

Mr Diamond was in the news earlier this month when he said the time for "remorse" from bankers, widely blamed for being a major cause of the global financial crisis in 2008, was over.