UK unveils pre-election budget

Finance minister announces plans to tackle country’s spiralling deficit.

Darling extended a six-month work or training guarantee for under 24-year-olds to 2012 [EPA]
Darling extended a six-month work or training guarantee for under 24-year-olds to 2012 [EPA]

Alan Fisher, Al Jazeera’s correspondent in London, said: “This will be seen as a tax on the rich and will play well with Labour’s core support.”

‘Growth package’

Darling told the UK parliament on Wednesday that his ruling Labour Party had made the “right calls” during the global financial crisis and that “tough choices” lay ahead.

In depth

  Blog: Alan Fisher outlines the day’s events
  Video: Darling presents UK budget

The minister said he had lowered the forecasts for the country’s hefty budget deficit out to 2014/15, citing stronger tax receipts.

He predicted borrowing this year will be $250bn, down from the previously forecast record of $267bn, and said he would reduce the deficit by more than initially planned over the next four years.

The minister said government was maintaining its forecast for economic growth this year of 1 to 1.5 percent, but had lowered next year’s forecast slightly to 3 to 3.5 per cent from 3.5 per cent.

He said he planned a one-off “growth package” of $3.73bn that would “help small business, promote innovation [and] invest in national infrastructure”.

In response to the statement, David Cameron, the leader of the Conservatives, said: “The biggest risk to the recovery is five more years of this prime minister [Gordon Brown].”

Cameron said: “This chancellor [finance minister] had his last chance to do something good for this country and he totally failed.

“They are just going to carry on taxing, carry on spending and carry on failing.”

Nick Clegg, the leader of the opposition Liberal Democrats, said both Darling and Cameron were “in denial” about cuts to spending.

Green bank

Darling also announced the creation of a “green bank” to invest in environmentally-friendly transport and energy projects.

Darling said the government had made the ‘right calls’ during the global financial crisis

He said: “It [the bank] will control £2bn [$3bn] worth of equity.

“Half will come from the asset sales, including the Channel Tunnel rail link, with the rest matched by private investment.

“This equity will unlock billions more of finance from the private sector.

“The fund will focus first on investing in green transport and sustainable energy, in particular offshore wind power, where Britain is already the world-leader.”

The budget is being seen as a key litmus test for voters who remain angry that the economy tipped into the worst recession since the Great Depression under his stewardship.

The opposition Conservatives have pledged to announce a new budget within 50 days if they are elected.

Source : Al Jazeera, News Agencies

More from News
Most Read