“Chancellor of the Exchequer George Osborne promised another austere budget and policies designed to mute calls for a fiscal stimulus for the U.K. economy.
Osborne said the pressures facing Cyprus are a reminder of what financial markets will do to nations that fail to act and suggested that he will resist calls in the March 20 annual budget to borrow money to fund giveaways. Instead, he promised measures to help the British retirees, military and diplomatic staff in Cyprus who are affected by the tax on bank deposits dictated by the island’s bailout, and he said he’d support plans to stimulate economic growth in Britain’s regions.
“There is no easy answer, there is no miracle cure,” Osborne, 41, told BBC1 Television inLondon yesterday. “We have to go on confronting the very difficult economic problems.”
Calls for greater action to aid growth from both his Conservative Party and the Liberal Democrats in the coalition government have subsided in recent days, suggesting Osborne’s budget will include measures to appease cabinet critics such as Business Secretary Vince Cable. Osborne will have to fund such actions with cuts elsewhere to stay the course on austerity.
The opposition Labour Party repeated its call for Osborne to cut value-added tax, reduceNational Insurance (ANAT) contributions for small companies and reintroduce the 10 percent starting rate of income tax. The party’s Treasury spokesman, lawmaker Ed Balls, suggested he would back an income-tax cut.
“If he wants to cut the basic rate, we will support him in that,” Balls told the same BBC program yesterday.
