Tuesday 22 May 2018

Osborne sticks to austerity plan in British budget

London, March 20, 2014

British finance minister George Osborne courted voters ahead of an election in 2015 with promises of help for savers, tax breaks for manufacturers and lower levies on beer and bingo.

In an upbeat annual budget statement, Osborne announced upgrades to official forecasts for the country's economic growth, although he stressed he would stick to his belt-tightening plans which will include a cap on welfare spending.

His help to savers - who have been hurt by near-zero interest rates - included an easing of requirements on pensioners to buy annuities and creation of government savings accounts which will pay above-market interest rates to people aged more than 65.

Shares in insurance firms fell on the announcement.

Britain goes to the polls in May next year and the annual budget plan is one of the government's last opportunities to make a difference to how people feel about their finances before then.

Osborne hopes the improving economy and his focus on fixing Britain's public finances will be trump cards in the fight against Labour, which remains a few percentage points in polls ahead of the Conservatives.

"I have never shied away from telling the British people about the difficult decisions we face. And just because things are getting better, I don't intend to do so today," he said, adding that more spending cuts would be needed after the election.

Osborne announced the latest in a series of increases in the how much people can earn before paying income tax.

He also raised the threshold at which British earners pay a tax rate of 40 per cent for the first time since the 2010 election.

Treasury officials stressed the budget did not represent a relaxation of the fiscal drive.

The new forecasts by the Office for Budget Responsibility painted a picture of solid recovery with the economy now set to grow 2.7 per cent this year.

That was higher than a forecast of 2.4 per cent made as recently as December and much higher than an estimate of 1.8 per cent a year ago, when Britain was still struggling to shrug off the after-effects of the global financial crisis.

"That's the biggest upward revision to growth between budgets for at least 30 years," Osborne said to cheers from members of his Conservative Party.

Growth in 2015, Osborne said, was expected to be 2.3 per cent, up slightly from December's forecast for 2.2 per cent.-Reuters

Tags: austerity | Osborne |


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