British Budget Seen as Conservative Election Statement

George Osborne
British chancellor of the exchequer George Osborne in London, England, March 24, 2011 (HM Treasury)

In introducing his spending plans for the next half year on Wednesday, British chancellor George Osborne drew a contrast between his Conservative Party’s successful economic policy and the opposition Labour Party’s obsession with taxing the rich.

“From his first to his last sentence — from boasting about Britain’s growth to unveiling the coalition’s version of the mansion tax — Chancellor George Osborne delivered his Autumn Statement with not just one eye but both fixed firmly on polling day,” wrote the BBC’s political editor, Nick Robinson.

Osborne told lawmakers in London 3 percent economic growth was expected for this year, making Britain the fastest-growing Western economy. He also reported that half a million jobs had been added this year and unemployment was set to fall to 5.4 percent in 2015 which would be one of the lowest jobless rates in Europe. Read more “British Budget Seen as Conservative Election Statement”

Britain’s Osborne to Freeze Benefits, Cut Pension Tax

British chancellor of the exchequer George Osborne attends a meeting in London, England, September 15, 2014
British chancellor of the exchequer George Osborne attends a meeting in London, England, September 15 (Cabinet Office)

Britain’s chancellor George Osborne on Monday promised a next Conservative Party government would freeze welfare benefits for people of working age and abolish taxes on pensions. In a conference speech, he positioned his as the “party of progress” and dismissed the opposition Labour Party as living in the past.

Speaking in Birmingham, Osborne said the freeze would not include disability benefits, maternity pay and pensions but save £3 billion — money he would put toward financing three million apprenticeships for young Britons, “three million more chances for a better life so we help our citizens get jobs instead of more immigration from abroad.”

The freeze would nevertheless be “a serious contribution to reduce the deficit,” said Osborne, who argued it was also fair. “Families out of work should not get more than the average family in work.”

According to the Treasury, some ten million households would be affected by the freeze, roughly half of which are working. Read more “Britain’s Osborne to Freeze Benefits, Cut Pension Tax”

Minimum Wage Increase Positions Osborne for Leadership

British chancellor of the exchequer George Osborne in London, England, March 24, 2011
British chancellor of the exchequer George Osborne in London, England, March 24, 2011 (HM Treasury)

Britain’s coalition government has already had a remarkably busy new year on the economic front, with announcements about wholesale changes to the country’s financial map. The man largely at the center of all of this is Chancellor of the Exchequer George Osborne. Coming off a banner 2013 in which The Times named him “Briton of the year,” he has moved from topic to topic and done more to shape the look of his Conservative Party in recent months than even the prime minister, David Cameron. Among other things, he has proposed a £25 billion spending cut, given the European Union a stern talking to about reform and, most recently, promoted a minimum wage increase. Read more “Minimum Wage Increase Positions Osborne for Leadership”

Weak Austerity Vindicates Britain’s Ruling Coalition

Britain’s chancellor of the exchequer, George Osborne, celebrated a turnaround in the island nation’s economy as vindication of his austerity program on Thursday. “We have held our nerve while those who predicted there would be no growth until we turned the spending taps back on have been proved comprehensively wrong,” he told lawmakers in London.

As recently as April, Osborne was urged by both the opposition Labour Party and the International Monetary Fund to increase public spending in order to stimulate growth. Since, Britain’s has been one of the fastest growing economies in the developed world. Osborne said forecasts showed growth in 2013 was expected to be 1.4 percent, rising to 2.4 percent next year.

The government’s popularity doesn’t seem to have been affected much. Public approval hasn’t exceeded 30 percent in months while Labour still outpolls Osborne’s Conservatives. Read more “Weak Austerity Vindicates Britain’s Ruling Coalition”

Labour Undermined Britain’s Standing in Syria Vote: Ministers

The British flag flies over the Houses of Parliament in London, England
The British flag flies over the Houses of Parliament in London, England (Unsplash/Matt Milton)

British ministers on Sunday accused the opposition Labour Party of undermining Britain’s standing in the world by blocking possible military intervention in Syria after chemical weapons were allegedly used there last week.

Chancellor of the Exchequer George Osborne and Foreign Secretary William Hague said in separate interviews that Labour had acted “opportunistically” by voting down a government motion that could have paved the way for British involvement in a military strike against the Middle Eastern country. Read more “Labour Undermined Britain’s Standing in Syria Vote: Ministers”

Britain to “Stick” to Spending Plan, Labour Equivocal

Britain’s chancellor George Osborne said on Sunday that he intends to continue with his austerity program even if the economy is hardly recovering. Labour’s Ed Balls was critical but also said that he would largely accept the government’s savings if the next election returns his party to government.

Osborne appeared slightly optimistic about Britain’s economic prospects on the BBC’s The Andrew Marr Show, pointing out that unemployment is down and the economy is growing, even if it was still 3.3 percent smaller during the first three months of this year than it was in early 2008, before the start of the financial crisis.

“I think we can turn this country round,” he said, “but we’ve got to stick at the economic plan. That is, reducing our debts, making our businesses more competitive, helping to create jobs, making sure Britain can win the global race.”

Osborne is due to deliver another £11.5 billion worth of spending reductions next week for the 2015-2016 fiscal year. Read more “Britain to “Stick” to Spending Plan, Labour Equivocal”

Labour Urges Stimulus, Tax Relief to Promote Growth

Labour’s shadow chancellor Ed Balls advocated tax cuts as well as stimulus spending on Sunday as an alternative to the government’s austerity policies which he believes have hurt Britain’s economy.

“The reason the deficit is going up, the reason families are under so much pressure, is because the economy is not growing,” Balls said on the BBC’s The Andrew Marr Show.

The British economy contracted .3 percent in the fourth and final quarter of last year and is still 3.3 percent smaller than during the first quarter of 2008, before the financial crisis. Despite a one million increase in private-sector jobs since they formed a coalition government, the Conservative and Liberal Democrat parties appear to have failed to revitalize the island nation’s economic prospects.

Chancellor of the Exchequer George Osborne, a Conservative who is set to unveil his budget for the next fiscal year on Wednesday, said on the same program that Britain should stay the course, insisting there is no “miracle cure” to make up for the “hard work” of reducing the deficit and improving economic competitiveness.

Osborne has reduced the shortfall by a mere quarter, however, while public-sector spending in real terms continues to increase. Borrowing last year was higher than in the year before. The Treasury expects to spend £756 billion by the time of the next election compared with £683 billion in 2012.

Balls has repeatedly spoken out against spending cuts, rather called for stimulus spending. Asked on Sunday whether the government could borrow to promote growth, he argued, “Of course you can.” Yet he also chastised the coalition for borrowing some £200 billion more than it said it intended when it took office.

Instead of lowering tax rates for the highest income earners, Balls also suggested repeating a tax on bankers’ bonuses, enacting a mansion tax on homes worth more than £200,000 and investing in home construction to help middle and low-income families. “Any tax cut” for them, he said, “is better than none.” He specifically suggested a sales tax cut.

Rather than reducing low-income tax rates, the government has raised the personnel allowance £1,335 so Britons can earn £9,940 per year before paying income tax at all. The threshold for paying the top 40 percent income tax rate is slated to be raised 1 percent next year and another 1 percent in 2015.

Britain to Miss Fiscal Targets, Credit Rating in Doubt

The Houses of Parliament in London, England at dawn, April 14, 2011
The Houses of Parliament in London, England at dawn, April 14, 2011 (Chris Goldberg)

In his autumn statement to Parliament on Wednesday, Britain’s chancellor of the exchequer, George Osborne, announced that growth will be slower and borrowing higher than previously forecast.

Even if he insisted that the United Kingdom is “heading in the right direction,” the government missing its deficit and debt targets has some worried that the country may be in danger of losing its credit rating. Read more “Britain to Miss Fiscal Targets, Credit Rating in Doubt”

Britain’s Osborne: No Turning Back on Fiscal Policy

Even if Britain’s economy is projected to expand less than 1 percent next year and the government has had to push back its fiscal targets, Chancellor of the Exchequer George Osborne does not intend to revise his strategy. “To turn back now would be a complete disaster,” he said on the BBC’s The Andrew Marr Show on Sunday.

Britain’s ruling coalition of Conservatives and Liberal Democrats had extended the deadline for eradicating the nation’s structural deficit by two years. The Office for Budget Responsibility is expected to announce this week that it will take another extra year, meaning the government’s original five year plan becomes an eight year one.

Osborne nevertheless touted success on Sunday, arguing that at least one of the promises he made — “make sure that Britain pays its way in the world, that it was seen as a credible place to invest” — is kept. Read more “Britain’s Osborne: No Turning Back on Fiscal Policy”

Britain Deepens Cuts in Spending, Tax Rates

Britain’s coalition government canceled a planned rise in fuel duties and accelerated and deepened previously announced cuts in corporate tax rates in what Chancellor George Osborne dubbed his “budget for growth.”

Osborne told Parliament on Wednesday that the country’s corporate tax would be cut to 23 percent by 2014 from 28 percent currently.

“Let it be heard clearly around the world — from Shanghai to Seattle and from Stuttgart to Sao Paolo — Britain is open for business,” Osborne declared as he announced the changes in his annual budget to lawmakers.

By raising taxes on oil companies by some £2 billion, the coalition of Conservatives and Liberal Democrats can cut prices at the pump. Hikes in alcohol and tobacco duties planned by the previous Labour government will not be reversed though.

Almost immediately after it assumed power, the British government introduced an emergency budget that was designed to “pay for the mistakes of the past,” as Osborne put it. It included increases in value added and capital gains taxes along with heavy austerity measures that were designed to restore fiscal balance by 2016.

Britain’s bloated public sector and costly welfare system expanded under successive Labour governments during the last two decades, undermining the country’s competitiveness. Prime Minister Gordon Brown plunged Britain further into debt at the onset of the recent financial crisis with bank bailouts and stimulus measures.

In an effort to simplify the tax code, 43 different tax reliefs will be scrapped but the government is introducing a shared equity scheme in the housing market to help first time home buyers purchase properties.

Osborne more than doubled the number of planned “enterprise zones” from ten to 21. Set up in deprived parts of England, these areas would benefit from relaxed planning laws and discount business rates to encourage job creation.

Enterprises zones were introduced by Margaret Thatcher’s government in the 1980s. Eleven such zones were established in 1980 and an additional thirteen in 1982, all in blighted neighborhoods and exempt from regular planning controls and taxes. Their effect on job growth was limited except for the London Docklands, largely derelict thirty years ago but now booming with commerce and luxury apartments.

Britain’s coalition government has already begun deregulating burdensome labor laws, making it easier for businesses to hire and fire workers. Under last year’s spending review, nearly two hundred publicly funded bodies supposed to facilitate the arts, education, the environment and health were scrapped and another 118 have been identified for merger.

Amid heavy spending cuts and tax relief for businesses, Osborne had to adjust his growth forecast for 2011 from 2.1 down to 1.7 percent, prompting criticism from the opposition. “Every time he comes to this house, growth is downgraded,” said Labour leader Ed Miliband.

Despite allegations of “unfair” austerity measures, the British state is estimated to borrow close to £150 billion this year. The national debt is expected to equal 60 percent of national income, rising to 71 percent in 2012 before falling to 69 percent by 2015.